NEW YORK, Nov. 10, 2022 (GLOBE NEWSWIRE) — Silver Spike Investment Corp. (“Silver Spike” or the “Company”), a specialty finance company that was formed to invest across the cannabis ecosystem through investments in the form of direct loans to, and equity ownership of, privately held cannabis companies, today announced its financial results for the quarter ended September 30, 2022.

Second Quarter 2023 Highlights

• Total investment income of $1.2 million
• Net investment income of $0.6 million, or $0.09 per share
• Investment portfolio of $24.5 million at fair value
• Net asset value (“NAV”) per share increased to $13.73 on September 30, 2022 from $13.64 on June 30, 2022

Scott Gordon, Chairman and Chief Executive Officer of Silver Spike, commented, “We continue leveraging our platform’s direct origination engine to build a robust pipeline of attractive lending opportunities. Our rigorous underwriting standards and time-tested specialized structuring skills position Silver Spike as one of the leading providers of credit to a regulatorily complex and rapidly-growing industry with little access to traditional sources of capital. Throughout the quarter, our investment adviser diligenced several potential private and public company borrowers. In the month of October, we made three investments that were largely a result of these diligence efforts.”

Conference Call
Silver Spike will host a conference call and webcast to discuss the Company’s second quarter 2023 financial results at 4:30 p.m. Eastern Time on Thursday, November 10, 2022. Participants may register for the call here. A live webcast of the call will also be available on the Company’s website at ssic.silverspikecap.com.

The presentation to be used in connection with the conference call and webcast is available at ssic.silverspikecap.com.

A replay of the call will be available at ssic.silverspikecap.com by end of day November 11, 2022.

Background
Silver Spike Investment Corp. is a closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended, and has elected to be treated as a regulated investment company for U.S. federal income tax purposes. On February 8, 2022, Silver Spike completed its initial public offering. Silver Spike is managed by Silver Spike Capital, LLC, an investment manager focused on the cannabis and alternative health and wellness industries.

Results of Operations
For the three months ended September 30, 2022, total investment income was $1.2 million. This compares to total expenses of $0.6 million, resulting in net investment income of approximately $0.6 million, or $0.09 per share.

Silver Spike recorded a net unrealized gain of slightly more than $0.0 million during the second quarter, primarily related to the fair valuation of our debt investments.

The Company generated a net increase in net assets from operations of $0.6 million, or $0.09 per share.

Net Asset Value
As of September 30, 2022, NAV per share increased to $13.73, compared to $13.64 as of June 30, 2022. The increase in NAV per share was primarily driven by the results from operations. Total net assets at the end of the second quarter were $85.3 million, compared to $84.8 million at the end of the first quarter.

Portfolio and Investment Activity
As of September 30, 2022, Silver Spike’s investment portfolio had an aggregate fair value of approximately $24.5 million comprising $24.5 million in secured loans in 2 portfolio companies.

During the second quarter, the Company did not make any investments.

As of the end of the second quarter, there were no loans on non-accrual status.

Liquidity and Capital Resources
At September 30, 2022, the Company had $61.1 million in available liquidity, comprising $61.1 million in cash and cash equivalents.

About Silver Spike Investment Corp.
Silver Spike, a specialty finance company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended, was formed to invest across the cannabis ecosystem through investments in the form of direct loans to, and equity ownership of, privately held cannabis companies. Silver Spike’s investment objective is to maximize risk-adjusted returns on equity for its shareholders by investing primarily in secured debt, unsecured debt, equity warrants and direct equity investments in cannabis companies and other companies in the health and wellness sector. Silver Spike is managed by Silver Spike Capital, LLC, an investment manager focused on the cannabis and alternative health and wellness industries. For more information, please visit https://ssic.silverspikecap.com/.

Forward-Looking Statements
Certain information contained herein may constitute “forward-looking statements” that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about the Company, its current and prospective portfolio investments, its industry, its beliefs and opinions, and its assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the Company’s control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including, without limitation, the risks, uncertainties and other factors identified in the Company’s filings with the SEC. Investors should not place undue reliance on these forward-looking statements, which apply only as of the date on which the Company makes them. The Company does not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law.

Contacts

Investors:
Bill Healy
[email protected]
212-905-4933

Media:
Alan Oshiki and Sydney Gever
Abernathy MacGregor
[email protected]
212-371-5999

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

Conference call and webcast: today, August 31, 2022, 9:00 am ET

REHOVOT, Israel, Aug. 31, 2022 /PRNewswire/ — Evogene Ltd. (Nasdaq: EVGN) (TASE: EVGN), a leading computational biology company targeting to revolutionize life-science product discovery and development across multiple market segments, announced today its financial results for the second quarter ended June 30, 2022.

Mr. Ofer Haviv, Evogene’s President and Chief Executive Officer, stated, “We are very pleased with the two recent important developments that have taken place at the Evogene group: namely, the strategic collaboration and $10 million investment by ICL, a leading global specialty minerals company, into our subsidiary, Lavie Bio; as well as the launch of the Phase I first in human clinical trial, by our subsidiary, Biomica.”

“The strategic collaboration between ICL and Lavie Bio and $10 million investment, combines Lavie Bio’s ag-biologicals expertise, built on Evogene’s Microboost AI tech engine, with ICL’s fertilizer experience, enabling the development of a pipeline of innovative bio-stimulant products for agriculture. Especially in a time of food scarcity, high prices, and macroeconomic uncertainty, Lavie Bio and ICL’s shared vision is to enhance global food quality, agricultural sustainability, and increased productivity. ICL will join Corteva, a major U.S. agricultural chemical and seed company, as well as Evogene, as a new shareholder of Lavie Bio and I am very proud that these two agricultural giants have a strong interest in what Evogene has built.”

“From Evogene’s standpoint, this investment in our subsidiary Lavie Bio, is an additional key milestone that demonstrates the power of our business model, whereby we are leveraging the value of our tech engines through dedicated subsidiaries. It shows that our hard work in building, investing in and strengthening our subsidiaries, all of which are leveraging our underlying computational predictive biological tech engines, is the right strategy and bears fruit.”

Continued Mr. Haviv, “The second important development was the launch by Biomica of its phase I clinical trial and the announcement that the first patient was dosed in its Phase I clinical trial for its microbiome-based immuno-oncology drug candidate, BMC128. The drug candidate is a consortium of microbes, which Biomica selected through a microbiome analysis via our MicroBoost AI tech engine.”

“While Evogene has traditionally leveraged its platform and AI technology engines towards agriculture, Biomica is proof that we are uniquely positioned to play an important role in human health and is strong validation that our technology can be leveraged across multiple and massive industries.”

“Finally, we continued to strengthen our management team, recently adding Eyal Ronen, as Executive Vice President of Business Development bringing us over 20 years of extensive business development experience with biotech companies. Eyal’s focus is to create and bring us additional value by building new partnerships or forming new subsidiaries, leveraging our technology engines and expanding our activities into new areas. I strongly believe that Evogene has significant untapped potential in its technology engines, and Eyal will focus on realizing some of that value.”

Mr. Haviv added, “Evogene today is at a key inflection point, whereby we are meeting critical milestones and the inherent value of our subsidiaries is becoming increasingly obvious. Evogene’s goal in the near term, is to continue to bring high value-adding partners and investors at the subsidiary level, who understand and can value the potential from the products that our subsidiaries are developing. This we believe will demonstrate in a very public way, the significant untapped value contained within our activities.”

“Our target is that each subsidiary will have its own financial resources to support its activities until its success, while we at Evogene, in addition to being a major shareholder, continue to play a major role in maintaining and building their competitive advantage through our tech-engines.”

“In parallel, we are targeting and exploring the potential to establish new activities that can benefit from our technology. This is the main mission of our new EVP of Business Development, Eyal Ronen, and we are already starting to see some of his positive impact,” concluded Mr. Haviv.

Consolidated Financial Results Summary

Cash position: Evogene continues to maintain a solid financial position for its activities with approximately $35.3 million in consolidated cash, cash related accounts and marketable securities as of June 30, 2022.  Approximately $3.6 million of Evogene’s consolidated cash is appropriated to its subsidiary, Lavie Bio. The Company does not have bank debt. It is noted that these amounts do not include the recent $10 million investment of ICL in Lavie Bio, which was fully received in August 2022 and will be reflected in the financial statements of the Company for the third quarter.

During the second quarter of 2022, the consolidated cash usage was approximately $9.3 million, or approximately $6.4 million, excluding Lavie Bio. Out of the $9.3 million, $1.7 million is a non-cash charge related to foreign exchange expenses due to US Dollar and New Israeli Shekel exchange rate differences and a decrease in the market value of marketable securities on Evogene’s balance sheet.

As previously stated, Evogene’s full year net cash burn rate, excluding exchange rate impacts in 2022, is expected to be in the range of $26-28 million including Lavie Bio and $18-20 million excluding Lavie Bio, which manages its own cash position.

Revenues: Revenues for the second quarter were $312 thousand, in comparison to $135 thousand in the same period the previous year. Revenues were primarily due to the initial sales of Lavie Bio’s Thrivus product (previously branded as Result) and sales of Canonic products in the Israeli market.

R&D expenses for the quarter, which are reported net of non-refundable grants received, were $5.4 million, in comparison to $5.0 million in the same period the previous year. The increase in R&D expenses were primarily due to:

1. Biomica’s ongoing phase I trial of its first-in-human proof-of-concept study in its immuno-oncology program; and
2. Lavie Bio’s activities supporting the production and commercialization of its inoculant product;

Business Development expenses were approximately $1.0 million for the second quarter of 2022, in comparison to $0.7 million in the same period the previous year. The increase in the Business Development expenses was primarily due to recruitment of business development personnel supporting the commercialization activities of Evogene’s subsidiaries.

General and Administrative expenses remained stable, and for the second quarter of 2022 were $1.7 million, in comparison to $1.8 million in the same period in the previous year.

Operating loss: Operating loss for the second quarter of 2022 was $8.0 million in comparison to $7.4 million in the same period in the previous year.

Financing expenses for the second quarter of 2022 were $1.7 million in comparison to financing income of $0.6 million in the same period in the previous year. The increase in financing expenses was mainly due to the US Dollar and New Israeli Shekel exchange rate differences between periods and a decrease in marketable securities value as mentioned above.

Net loss: The net loss for the second quarter of 2022 was $9.8 million in comparison to a net loss of $6.9 million in the same period in the previous year.   The increase in net loss was mainly due to the financing expenses as described above.

Conference Call & Webcast Details:

Date: August 31, 2022

Time: 9:00 am ET; 16:00 Israel time

Dial-in numbers:1-888-281-1167 toll free from the United States, or +972-3-918-0609 internationally

Webcast & Presentation link available at:

https://www.evogene.com/investor-relations/presentations-and-webcasts/

The Company’s investor presentation can be viewed at the above link, which is in the investor relations section of the company website.

Replay Information: A replay of the conference call will be available approximately two hours following the completion of the call.

To access the replay, please dial 1-888-326-9310 toll free from the United States, or +972-3-925-5901 internationally. The replay will be accessible following the call for three days. An archive of the webcast will be available on the Company’s website

About Evogene Ltd.:
Evogene (NASDAQ: EVGN, TASE: EVGN) is a computational biology company aiming to revolutionize the development of life-science based products by utilizing cutting edge technologies to increase probability of success while reducing development time and cost. Evogene established three unique technological engines – MicroBoost AI, ChemPass AI and GeneRator AI – leveraging Big Data and Artificial Intelligence and incorporating deep multidisciplinary understanding in life sciences. Each technological engine is focused on the discovery and development of products based on one of the following core components: microbes (MicroBoost AI), small molecules (ChemPass AI), and genetic elements (GeneRator AI). Evogene uses its technological engines to develop products through subsidiaries and with strategic partners. Currently, Evogene’s main subsidiaries utilize the technological engines to develop human microbiome-based therapeutics by Biomica Ltd., medical cannabis products by Canonic Ltd., ag-chemicals by Ag Plenus Ltd. and ag-biologicals by Lavie Bio Ltd.  For more information, please visit: www.evogene.com.

Forward Looking Statements

This press release contains “forward-looking statements” relating to future events. These statements may be identified by words such as “may”, “could”, “expects”, “hopes” “intends”, “anticipates”, “plans”, “believes”, “scheduled”, “estimates” or words of similar meaning. For example, Evogene is using forward-looking statement in this press release when it discusses its expectations with respect to value creation and potential funding options, including through its subsidiaries, untapped potential and value, including the potential to establish new activities that can benefit from Evogene’s technology, its and its subsidiaries’ expected trials, studies, product advancements, pipelines, commercializations, collaborations, sales, launches, milestones, target markets, cash usage and other plans for 2022 and on, and the potential advantages of its technology. Such statements are based on current expectations, estimates, projections and assumptions, describe opinions about future events, involve certain risks and uncertainties which are difficult to predict and are not guarantees of future performance. Therefore, actual future results, performance or achievements of Evogene and its subsidiaries may differ materially from what is expressed or implied by such forward-looking statements due to a variety of factors, many of which are beyond the control of Evogene and its subsidiaries, including, without limitation, those risk factors contained in Evogene’s reports filed with the applicable securities authority. In addition, Evogene and its subsidiaries rely, and expect to continue to rely, on third parties to conduct certain activities, such as their field-trials and pre-clinical studies, and if these third parties do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, Evogene and its subsidiaries may experience significant delays in the conduct of their activities. Evogene and its subsidiaries disclaim any obligation or commitment to update these forward-looking statements to reflect future events or developments or changes in expectations, estimates, projections and assumptions.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

Second Quarter 2022 Revenue Growth of 52.4% YoY and 17.6% QoQ to $72.8 million

Completed NuLeaf Acquisition and Expanded Vertically Integrated Footprint in Nevada

Established Fifth Vertically Integrated State-Level Operation in Ohio with Medical Dispensary License Win

BOCA RATON, Fla., Aug. 29, 2022 (GLOBE NEWSWIRE) — Jushi Holdings Inc. (“Jushi” or the “Company”) (CSE: JUSH) (OTCQX: JUSHF), a vertically integrated, multi-state cannabis operator, announced its financial results for the second quarter 2022 (“Q2 2022”) ended June 30, 2022. The Company became a U.S. reporting company effective August 12, 2022. All financial information is provided in U.S. dollars unless otherwise indicated and are prepared under U.S. Generally Accepted Accounting Principles (“GAAP”).

Second Quarter 2022 Highlights

• Total revenue of $72.8 million, an increase of 52.4% year-over-year and 17.6% as compared to the quarter ended March 31, 2022 (“Q1 2022”)
• Retail revenue increased 16.1% to $67.3 million and wholesale revenue increased 42.1% to $5.5 million, as compared to Q1 2022
• Gross profit of $26.7 million, an increase of 17.2% year-over-year and 39.5% as compared to Q1 2022
• Adjusted gross profit of $27.8 million, an increase of 19.1% year-over-year and 12.3% as compared to Q1 2022
• Net Income of $12.1 million
• Adjusted EBITDA of $0.5 million
• Cash and cash equivalents were $43.2 million as of the quarter end

Second Quarter 2022 Operational Highlights

• Expanded the Company’s vertically integrated footprint in Nevada with the completion of the NuLeaf, Inc. (“NuLeaf”) acquisition, adding a 27,000 sq. ft. cultivation facility, a 13,000 sq. ft. processing facility, and three adult-use and medical retail dispensaries in the state
• Opened the 32^nd and 33^rd retail locations nationwide, marking the Company’s third Beyond Hello location in California and fourth dispensary in Nevada
• Awarded a provisional medical marijuana dispensary license in the Cincinnati Tri-State Area of Ohio, establishing the Company’s fifth vertically integrated state-level operation
• Debuted two new product lines in Pennsylvania under the Company’s brand The Lab, including a line of solventless live rosin extracts and a line of hydrocarbon extracts, comprised of high-quality vapes and concentrates

Recent Developments

• Transitioned from IFRS to U.S. GAAP reporting as a result of becoming a U.S. reporting issuer as of August 12, 2022
• Opened the 34^th retail location nationwide and third Beyond Hello dispensary in Alexandria, Virginia
• Opening the 35^th retail location nationwide and fourth Beyond Hello dispensary in Fairfax, Virginia on August 31, 2022

Management Commentary

“We are pleased to report solid second quarter top-line growth and improved sequential profitability, a strong indication that our strategy, capital investments and cost savings initiatives are building a strong foundation on which we can continue to execute, despite the challenging macroeconomic environment,” said Jim Cacioppo, Chief Executive Officer, Chairman and Founder of Jushi Holdings Inc. “The development of our footprint in Nevada, including the addition of NuLeaf’s high-quality assets, were meaningful contributors to our retail performance in the second quarter.”

Mr. Cacioppo continued, “In the second quarter, we completed the first phase of construction of the cultivation portion of our grower-processor facilities in Pennsylvania and Virginia. In these two very important markets for Jushi, we are focused on expanding production, improving the sell-through rate of our own-branded products at our Beyond Hello^TM stores and building-out our wholesale business. We are also focused on diversifying our product portfolio, including the introduction of many new strains, along with hydro-carbon products and Live Rosin vapes and concentrates that will allow us to differentiate our product offering, while continuing to meet consumer demand.”

“Our team has done a commendable job navigating through these challenging market conditions. I am confident that our strong foundation and cost discipline will ensure we maintain our momentum into the second half of the year. We are excited about what lies ahead for Jushi and believe we are well-positioned to capitalize on the industry opportunity and drive long-term value for our shareholders,” concluded Mr. Cacioppo.

Use of Non-GAAP Financial Information

We believe that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to our financial condition and results of operations. For further information regarding these non-GAAP measures, including the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, please refer to the financial tables below, as well as the “Reconciliation of Non-GAAP Financial Measures” section of this press release.

Financial Results for the Second Quarter 2022

The following is a tabular summary and commentary of revenue, gross profit, adjusted gross profit, net income (loss), and net income (loss) per share for the three month periods ended June 30, 2022, March 31, 2022, and June 30, 2021.

($ in millions, except per share amounts)

Revenue in Q2 2022 increased 52.4% to $72.8 million as compared to $47.7 million in the second quarter of 2021 (“Q2 2021”), driven by the Company’s acquisitions in Nevada and Massachusetts, and new Beyond Hello store openings in Pennsylvania and Virginia. Revenue increased 17.6% to $72.8 million from $61.9 million in Q1 2022. The 17.6% increase in revenue was primarily driven by the acquisitions in Nevada in the first half of 2022, including contributions from four new state dispensaries, increased retail and wholesale activity in Massachusetts, and growth in retail sales in Illinois and Virginia.

Gross profit in Q2 2022 was $26.7 million, or 36.7% of revenue, compared to $19.1 million, or 30.9% of revenue in Q1 2022. Adjusted gross profit in Q2 2022 was $27.8 million, or 38.3% of revenue, compared to $24.8 million, or 40.0% of revenue in Q1 2022. Adjusted gross margin was negatively impacted by the under absorption of fixed costs at the Company’s grower-processor facilities as the wholesale business scales and increased promotional activity of Jushi branded products in Pennsylvania.

Operating expenses in Q2 2002 were $38.7 million, or 53.3% of revenue, compared to $37.3 million, or 60.3% of revenue in Q1 2022. The 703 basis point improvement in operating expenses as a percentage of revenue was primarily driven by managing labor and staffing expenses across the organization and lower share based compensation.

Q2 2022 net income was $12.1 million, or $0.06 per basic share and net loss of $0.15 per diluted share, compared to net income of $3.6 million, or $0.02 per basic share and net loss of $0.09 per diluted share, in Q2 2021. The net loss of $0.15 per diluted share in Q2 2022 was primarily due to the dilutive impact of the outstanding warrant derivative liability.

Adjusted EBITDA in Q2 2022 was $0.5 million, an increase of $1.4 million as compared to $(0.9) million in Q1 2022 and a decrease of $4.1 million compared to $4.6 million in Q2 2021. Adjusted EBITDA expansion was slowed by infrastructure and headcount investments at our grower processors that continue to have a transitional impact as the Company scales and slower-than-expected growth of wholesale operations.

Balance Sheet and Liquidity

As of June 30, 2022, the Company had approximately $43.2 million of cash and cash equivalents. The Company paid approximately $14 million in capital expenditures during Q2 2022. For the balance of the year, we expect capital expenditures to be in the range of $15 to 25 million, prior to any potential tenant improvement reimbursements or financings, for a total of $55 to $65 million for the full year 2022, subject to market conditions and regulatory changes. As of June 30, 2022, the Company had approximately $200 million in principal amount of total debt, excluding leases and property, plant, and equipment financing obligations. As of August 29, 2022, the Company’s Acquisition Facility had $60 million of available capacity, including the $25 million accordion feature. As of August 29, 2022, the Company’s issued and outstanding shares were 195,989,084 and its fully diluted shares outstanding were 290,921,762.

Outlook

Mr. Cacioppo commented, “Moving into the second half of the year, we are revising our fourth quarter 2022 annualized revenue to be between $320 to $350 million, with a low double digit Adjusted EBITDA margin. At the retail level, we expect to open three additional Beyond Hello stores in the next four months, including two locations in Virginia and one in Ohio. We are also moving an underperforming store in Pennsylvania. Moreover, we will continue work on adding additional operational grow rooms and expanding production at our grower-processor facilities as we look to increase the sell-through rate of our own branded products through our network of retail stores, along with pursuing wholesale opportunities.”

Mr. Cacioppo concluded, “By the end of 2022, we expect to operate 37 retail locations and approximately 330,000 sq. ft. of cultivation and processing capabilities, including 100,000 sq. ft. of canopy. As always, we are fiercely committed to generating return on investment for our shareholders, and I look forward to reporting on the meaningful strides we expect to make as we continue to strengthen our business through the remainder of 2022.”

Non-Reliance on Previously Issued First Quarter 2022 Financial Statements

In connection with the preparation of the Company’s unaudited condensed consolidated financial statements for the three and six months ended June 30, 2022, the Company’s management identified errors in its previously issued unaudited condensed balance sheet as of March 31, 2022, resulting in the understatement of certain non-current assets and associated accruals. In addition, management identified errors in the unaudited condensed consolidated statement of cash flows for three months ended March 31, 2022. Such errors resulted in the understatement of net cash flows used in operating activities, the overstatement of net cash flows used in investing activities, and the understatement of net cash flows provided by financing activities during the three months ended March 31, 2022. The Company believes such errors did not impact the cash balance as of March 31, 2022, and further believes there is no net change in cash flows during the three months then ended. The Company also believes that such errors will not materially impact the unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2022.

As a result, the Company will be required to restate its unaudited condensed interim consolidated financial statements for the Quarter Ended March 31, 2022, filed in Canada on the System for Electronic Document Analysis and Retrieval (“SEDAR”) on May 27, 2022, as amended on June 24, 2022.

On August 28, 2022, the Company’s Audit Committee concluded, after discussion with the Company’s management and its advisors, that the Company’s previously issued unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2022 (“First Quarter 2022 Interim Financial Statements “) were materially misstated due to such errors. As a result, the Company’s First Quarter 2022 Interim Financial Statements should no longer be relied upon. Similarly, any previously issued or filed reports, registration statements, press releases, earnings releases and investor presentations or other communications describing the Company’s First Quarter 2022 Interim Financial Statements should no longer be relied upon.

The Company will, as soon as practicable, make the appropriate adjustments, which will include restated consolidated financial statements and any other appropriate revisions.

Conference Call and Webcast Information

The Company will host a conference call to discuss its financial results for the second quarter 2022 at 9:00 a.m. ET today, Monday, August 29, 2022.

For interested individuals unable to join the conference call, a webcast of the call will be available for one year following the conference call and can be accessed via webcast on Jushi’s Investor Relations website.

About Jushi Holdings Inc.
We are a vertically integrated cannabis company led by an industry-leading management team. In the United States, Jushi is focused on building a multi-state portfolio of branded cannabis assets through opportunistic acquisitions, distressed workouts, and competitive applications. Jushi strives to maximize shareholder value while delivering high-quality products across all levels of the cannabis ecosystem. For more information, visit jushico.com or our social media channels, Instagram, Facebook, Twitter and LinkedIn.

Forward-Looking Information and Statements

This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation as well as statements that may constitute “forward-looking statements” within the meaning of within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, contained in this press release, including statements regarding our strategy, future operations, intended expansion of our retail operations and production capacity, intended expansion of our cultivation facilities, future financial position, projected costs, prospects, plans and objectives of management, including without limitation Q4 2022 annualized guidance, as well as expected filings, materiality or significance and effects of errors on current or prior period financial statements, and any anticipated conclusions of the Company, the Audit Committee or the Company’s management related thereto, are forward-looking statements. These forward-looking statements are based on Jushi’s current expectations and beliefs concerning future developments and their potential effects. As a result, actual results could differ materially from those expressed by such forward-looking statements and such statements should not be relied upon. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans,” “expects” or “does not expect,” “is expected,” “budget,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates” or “does not anticipate,” or “believes,” or variations of such words and phrases or may contain statements that certain actions, events or results “may,” “could,” “would,” “might” or “will be taken,” “will continue,” “will occur” or “will be achieved”. The forward-looking information and forward-looking statements contained herein may include but are not limited to, information concerning the expectations regarding Jushi, or the ability of Jushi to successfully achieve business objectives, and expectations for other economic, business, and/or competitive factors. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including risks related to the ability of Jushi to successfully and/or timely achieve business objectives, including with regulatory bodies, employees, suppliers, customers and competitors; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws; compliance with extensive government regulation, the risk that additional information may arise prior to the completion of restated condensed consolidated interim financial statements or other subsequent events that would require us to make additional adjustments, as well as other risks, uncertainties and other cautionary statements in the Company’s public filings with the applicable securities regulatory authorities on the SEC’s website at www.sec.gov and on SEDAR at www.sedar.com. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated, or expected.

Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice.

For further information, please contact:

Investor Relations Contact:
Michael Perlman
Executive Vice President of Investor Relations
561-281-0247
[email protected]

Media Contact:
Ellen Mellody
570-209-2947
[email protected]

The financial results contained herein are the responsibility of management and have not been reviewed by the Company’s independent registered public accounting firm, remains subject to change, and should not be considered final until the Company files its second quarter 2022 Quarterly Report on Form 10-Q.

JUSHI HOLDINGS INC.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(in thousands of U.S. dollars, except share and per share amounts)

JUSHI HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars, except share amounts)

JUSHI HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)

JUSHI HOLDINGS INC.
Reconciliation of Non-GAAP Financial Measures

EBITDA, Adjusted EBITDA and Adjusted Gross Profit

In addition to providing financial measurements based on GAAP, the Company provides additional financial metrics that are not prepared in accordance with GAAP. Management uses non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes and to evaluate the Company’s financial performance. These non-GAAP financial measures are EBITDA, Adjusted EBITDA and Adjusted Gross Profit (defined below). Management believes that these non-GAAP financial measures reflect the Company’s ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business, as they facilitate comparing financial results across accounting periods and to those of peer companies. As there are no standardized methods of calculating these non-GAAP measures, the Company’s methods may differ from those used by others, and accordingly, the use of these measures may not be directly comparable to similar measures used by others, thus limiting their usefulness. Accordingly, these non-GAAP measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

EBITDA, Adjusted EBITDA and Adjusted Gross Profit are financial measures that are not defined under GAAP. Management defines EBITDA as net income (loss), or “earnings”, before interest, income taxes, depreciation and amortization. Management defines Adjusted EBITDA as EBITDA before: (i) non-cash share-based compensation expense and other one-time charges; (ii) inventory-related adjustments; (iii) fair value changes in derivatives; (iv) other income/expense items (v) transaction costs; and (vi) start-up costs. These financial measures are metrics that have been adjusted from the GAAP net income (loss) measure in an effort to provide readers with a normalized metric in making comparisons more meaningful across the cannabis industry, as well as to remove non-recurring, irregular and one-time items that may otherwise distort the GAAP net income measure. Other companies in the Corporation’s industry may calculate this measure differently, limiting their usefulness as comparative measures. Management defines Adjusted Gross Profit as gross profit, as reported, adjusted to exclude certain inventory-related adjustments and start-up costs (within cost of goods sold).

JUSHI HOLDINGS INC.
UNAUDITED RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(in thousands of U.S. dollars)

(1) Net income (loss) includes amounts attributable to non-controlling interests.
(2) Includes amounts that are included in cost of goods sold and in operating expenses.
(3) Includes: (i) non-cash share-based compensation expense for the period; and (ii) severance costs.(4) Includes: (i) inventory step-up on business combinations; (ii) inventory recall reserves; and (iii) reserves for discontinued products. The inventory step-up on business combinations relate to the fair value write-up on inventory acquired on the business acquisition date and then sold subsequent to the acquisition date. The inventory recall reserves relate to the estimated impact of the Pennsylvania Department of Health recall and ban of vape products containing certain cannabis concentrates. The ban was lifted in June 2022.
(5) Includes: (i) remeasurement of contingent consideration related to acquisitions; (ii) losses (gains) on investments and financial assets; and (iii) losses (gains) on legal settlements.
(6) Expansion and start-up costs incurred in order to prepare a location for its intended use. Start-up costs are expensed as incurred and are not indicative of ongoing operations of each new location.

(7) Transaction costs include: (i) registration statement costs such as professional fees and other costs relating to our SEC registration; and (ii) acquisition and deal costs.

JUSHI HOLDINGS INC.
UNAUDITED RECONCILIATION OF GROSS PROFIT TO ADJUSTED GROSS PROFIT
(in thousands of U.S. dollars)

(1) Includes: (i) inventory step-up on business combinations; (ii) inventory recall reserves; and (iii) reserves for discontinued products. The inventory step-up on business combinations relate to the fair value write-up on inventory acquired on the business acquisition date and then sold subsequent to the acquisition date. The inventory recall reserves relate to the potential impact of the Pennsylvania Department of Health recall and ban of vape products containing certain cannabis concentrates. The ban was lifted in June 2022.
(2) Expansion and start-up costs incurred in order to prepare a location for its intended use. Start-up costs are expensed as incurred and are not indicative of ongoing operations of each new location.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

– Company expects to be EBITDA positive in 2023 –

SAN DIEGO and TORONTO, Aug. 25, 2022 /CNW/ – StateHouse Holdings Inc. (“StateHouse” or the “Company”) (CSE: STHZ) (OTCQX: STHZF), a California-focused, vertically integrated cannabis enterprise, today announced its financial results for the three and six months ended June 30, 2022 (“Q2 2022” and “YTD 2022”, respectively), and provided additional business updates. The unaudited condensed interim consolidated financial statements for Q2 2022 and corresponding management’s discussion and analysis are available for download from the Company’s investor website, statehouseholdings.com, and on the Company’s SEDAR profile. Unless otherwise indicated, all dollar amounts in this press release are denominated in U.S. currency.

“The second quarter was a landmark period for StateHouse, as we completed the acquisition of Loudpack to create a leading, fully integrated California cannabis company,” said Ed Schmults, Chief Executive Officer. “We then launched the first phase of a major integration initiative, which was completed before the end of the quarter and resulted in significant annual cost savings. One-time costs related to closing the Loudpack acquisition impacted profitability in Q2 2022, but with the integration activities underway, we exited the quarter in a much stronger competitive position. While California cannabis market conditions are currently challenging, particularly in wholesale, we are continuing to aggressively reduce costs and optimize operations, developing new consumer packaged cannabis products and expecting to generate material positive EBITDA⁽¹⁾ in 2023″.

Q2 2022 Highlights

• Total net revenues were $34.6 million, a 125% increase over the $15.4 million realized in the three months ended June 30, 2021 (“Q2 2021”). The increase reflected the acquisitions of UL Holdings Inc. (“Urbn Leaf”) and LPF JV Corporation (“Loudpack”), which were completed in March and April of 2022, respectively;
• Gross profit before adjustments for biological assets, was $14.7 million, a 110% increase as compared to $7.0 million in gross profit realized during Q2 2021. Consolidated gross margins during Q2 2022 were 42.6% of revenues, compared to 45.6% of revenues in Q2 2021, with the gross margin reduction primarily due to the year over year selling price declines on bulk cannabis in the California market and the addition of manufacturing revenues which typically operate on lower margins, partially offset by greater sell through of in-house manufactured products at Company owned retail stores;
• On April 4, 2022, the Company completed the acquisition of Loudpack to form one of the largest vertically integrated cannabis enterprises in California;
• On May 11, 2022, the Company announced new retail store openings in San Francisco and Grossmont, California;
• On May 19, 2022, the Company acquired a further 50% interest in its retail store in Seaside, California, bringing its interest in the store to 100%; and,
• On May 31, 2022, the Company announced initial integration measures that are expected to generate approximately $10.3 million of annualized cost savings.^{(2) (3)}

Subsequent Events

• On July 25, 2022, the Company officially changed its name from Harborside Inc. (“Harborside”) to StateHouse Holdings Inc. to honor its pioneering history and reflect its future direction in California’s cannabis sector. The Company’s subordinate voting shares were also reclassified as common shares on this date;
• On July 28, 2022, the Company announced that it reached a Partial Payment Installment Agreement with the Internal Revenue Service (“IRS”) to resolve and reduce legacy federal tax obligations related to the Internal Revenue Code Section 280E, resulting in a one-time non-cash gain of approximately $16.1 million. The Company continues to negotiate with the IRS over additional tax repayments; and,
• On August 15, 2022, StateHouse completed the transition to a common technology platform for its California retail stores, e-commerce and home delivery.

Operations Update

StateHouse has established a leading integrated cannabis platform that, when fully optimized, will minimize exposure to the volatile bulk cannabis market and allow the Company to operate as a focused, integrated CPG business with proprietary production, processing, brands and retail stores. In conjunction with the continuing reduction of costs, the Company expects to emerge with a scalable, controlled, profitable and more predictable cannabis business⁽²⁾.

By the end of Q2 2022, StateHouse was well underway with initial integration measures that are expected to generate approximately $10.3 million of annualized cost savings. ^{(2) (3)} As a result of this first phase of integration, StateHouse is now operating with a greatly reduced cost base. Following the initial integration measures, the Company has initiated additional cost reductions which are expected to result in a further $8-10 million in annualized savings. ^{(2) (3)}

Improvements were also completed across the Company’s operations. In cultivation, the Company has converted to a perpetual harvest program, with crop yields at the Salinas facility up 78% from last year through the first half of 2022, while also winning seven awards for quality, including three awards at the Emerald Cup and four medals at the California State Fair, including two golds and two silvers. At the Greenfield Campus, the adoption of best practices has led to enhanced efficiencies and improved gross profits. At retail, despite competitive pressures related to sales discounting, gross margins have held steady as the Company moves further towards its goal of in-house branded products representing 40% of total retail sales. On the administrative side, the Company is introducing a new ERP system for cultivation, rationalizing external relationships and suppliers and progressing on the consolidation of its finance and accounting systems into one common platform. With new management and a highly motivated team, StateHouse is revitalizing existing customer accounts and aggressively pursuing new ones.

As a result of the significant synergies and cost savings either achieved to date and financial forecasts of the Company, management expects StateHouse to generate materially positive Adjusted EBITDA⁽¹⁾ in 2023.

Management is also exploring the potential sale of various non-core assets, which is expected to generate approximately $5-8 million of non-dilutive capital,⁽³⁾ to strengthen its balance sheet and fund its growth objectives.⁽²⁾

Management Departure

Ahmer Iqbal, Chief Operating Officer, is leaving the Company effective September 30, 2022 to pursue other opportunities. StateHouse’s management team and Board of Directors thank Mr. Iqbal for his contributions to the Company and wish him the best in his future endeavours. Mr. Iqbal’s duties will be assumed by other members of the management team upon his departure.

Notes:

(1) This is a non-IFRS reporting measure. For a reconciliation of this to the nearest IFRS measure, see “Use of Non-IFRS Measures” and “Non-IFRS Measures” in the Company’s management discussion and analysis for the period ended June 30, 2022. See “Non-IFRS Measures, Reconciliation and Discussion”.
(2) This is forward-looking information and based on a number of assumptions. See “Cautionary Note Regarding Forward-Looking Information” below.
(3) These targets, and the related assumptions, involve known and unknown risks and uncertainties that may cause actual results to differ materially. While StateHouse believes there is a reasonable basis for these targets, such targets may not be met. These targets represent forward-looking information. Actual results may vary and differ materially from the targets. See “Cautionary Note Regarding Forward-Looking Information” and “Assumptions” below.

About StateHouse

StateHouse, a vertically integrated enterprise with cannabis licenses covering retail, major brands, distribution, cultivation, nursery and manufacturing, is one of the oldest and most respected cannabis companies in California. Founded in 2006, its predecessor company Harborside was awarded one of the first six medical cannabis licenses granted in the United States. Today, the Company operates 13 dispensaries covering Northern and Southern California and one in Oregon, distribution facilities in San Jose and Los Angeles, California and integrated cultivation/production facilities in Salinas and Greenfield, California. StateHouse is a publicly listed company, currently trading on the Canadian Securities Exchange (“CSE”) under the ticker symbol “STHZ” and the OTCQX under the ticker symbol “STHZF”. The Company continues to play an instrumental role in making cannabis safe and accessible to a broad and diverse community of California and Oregon consumers.

Non-IFRS Measures, Reconciliation and Discussion

This press release may contain references to “Adjusted EBITDA” and “Adjusted Gross Profit” which are non-IFRS financial measures. Management believes that these measures provide useful information as they represent the value of incremental sales.

Adjusted EBITDA is a measure of the Company’s overall financial performance and is used as an alternative to earnings or net income in some circumstances. Adjusted EBITDA is essentially net income (loss) with interest, taxes, depreciation and amortization, non-cash adjustments and other unusual items added back. This measure can be used to analyze and compare profitability among companies and industries, as it eliminates the effects of financing and capital expenditures. It is often used in valuation ratios and can be compared to enterprise value and revenue. This measure does not have any standardized meaning according to IFRS and therefore may not be comparable to similar measures presented by other companies.

Adjusted Gross Profit exclude the changes in fair value less costs to sell of the Company’s biological assets. Management believes this measure provides useful information as they represent the gross profit based on the Company’s cost to produce inventories sold while removing fair value measurements which are tied to changing inventory components and levels, as required by IFRS.

There are no comparable IFRS financial measures presented in StateHouse’s financial statements. Reconciliations of the supplemental non-IFRS measures are presented in the Company’s management’s discussion and analysis for the period ended June 30, 2022. The Company provides the non-IFRS financial measures 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 believes such measures provide information which is useful to shareholders and investors in understanding its performance and which may assist in the evaluation of the Company’s business relative to that of its peers. However, such 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 most comparable IFRS financial measure. For more information, please see “Use of Non-IFRS Measures” and “Non-IFRS Measures” in the Company’s management’s discussion and analysis for the period ended June 30, 2022, which is available under the Company’s profile on www.sedar.com.

Cautionary Note Regarding Forward-Looking Information

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian and United States securities legislation. To the extent any forward-looking information in this news release constitutes “financial outlooks” or “future-oriented financial information” within the meaning of applicable Canadian securities laws, the reader is cautioned not to place undue reliance on such information. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates, and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements include, among other things, statements relating to generating positive EBITDA by 2023, total amounts of annualized cost savings, the successes resulting from the Company’s integrated cannabis platform, amounts of in-house branded products sold, the implications of the sale of non-core assets, and the Company’s future profitability, potential cost reductions, and potential asset sales.

These forward-looking statements are based on reasonable assumptions and estimates of management of the Company at the time such statements were made. Actual future results may differ materially as forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to materially differ from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors, among other things, include: implications of the COVID-19 pandemic on the Company’s operations; fluctuations in general macroeconomic conditions; fluctuations in securities markets; expectations regarding the size of the cannabis markets where the Company operates; changing consumer habits; the ability of the Company to successfully achieve its business objectives; plans for expansion and acquisitions; political and social uncertainties; inability to obtain adequate insurance to cover risks and hazards; employee relations; the presence of laws and regulations that may impose restrictions on cultivation, production, distribution, and sale of cannabis and cannabis-related products in the markets where the Company operates; and the risk factors set out in the Company’s management’s discussion and analysis for the period ended June 30, 2022 and the Company’s listing statement dated May 30, 2019, which are available under the Company’s profile on www.sedar.com. Although the forward-looking statements contained in this news release are based upon what management of the Company believes, or believed at the time, to be reasonable assumptions, the Company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Readers should not place undue reliance on the forward-looking statements and information contained in this news release. The Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

The Company, through several of its subsidiaries, is directly involved in the manufacture, possession, use, sale, and distribution of cannabis in the recreational and medicinal cannabis marketplace in the United States. Local state laws where the Company operates permit such activities however, investors should note that there are significant legal restrictions and regulations that govern the cannabis industry in the United States. Cannabis remains a Schedule I drug under the United States Controlled Substances Act, making it illegal under federal law in the United States to, among other things, cultivate, distribute or possess cannabis in the United States. Financial transactions involving proceeds generated by, or intended to promote, cannabis-related business activities in the United States may form the basis for prosecution under applicable United States federal money laundering legislation.

While the approach to enforcement of such laws by the federal government in the United States has trended toward non-enforcement against individuals and businesses that comply with recreational and medicinal cannabis programs in states where such programs are legal, strict compliance with state laws with respect to cannabis will neither absolve the Company of liability under United States federal law, nor will it provide a defense to any federal proceeding which may be brought against the Company. The enforcement of federal laws in the United States is a significant risk to the business of the Company and any proceedings brought against the Company thereunder may adversely affect the Company’s operations and financial performance.

This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. The Company’s securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Assumptions

In developing the financial guidance set forth above, StateHouse made the following assumptions and relied on the following factors and considerations:

• The targets are based on StateHouse’s historical results including its year-to-date consolidated results of operations.
• The targets are subject to continued cultivation improvement.
• Targeted revenue at our retail dispensaries through the end of the year is based on our YTD results.
• Both retail and wholesale revenue sustainability and growth depend on a variety of factors, including among other things, location, competition, legal and regulatory requirements. Prices are projected forward at recently realized wholesale and retail prices.
• Cost of goods sold, before taking into account the impact of value changes in biological assets (which are non- cash in nature, and, accordingly, are excluded from calculations of Adjusted EBITDA, have been projected based on estimated costs of production and capacity available from a vertically integrated supply chain. Cost of goods sold relating to inventory purchased from third parties have been projected in line with historical levels.
• Selling, general and administrative expenses in future periods are assumed to decrease as a percentage of revenues due to inherent scalability of selling, general and administrative expenses and our cost cutting initiatives outlined above. Additionally, total selling, general and administrative expenses include an allocation for corporate overhead and public company costs.

The CSE has neither approved nor disapproved the contents of this news release. Neither the CSE nor its Market Regulator (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.

SOURCE StateHouse Holdings Inc.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

SANTA ANA, Calif., Aug. 19, 2022 (GLOBE NEWSWIRE) — Unrivaled Brands, Inc. (OTCQX: UNRV) (“Unrivaled” or the “Company”), a multi-state vertically integrated company focused on the cannabis sector with operations in California and Oregon, yesterday reported its second quarter 2022 financial results for the quarter ended June 30, 2022.

Financial Update

• During the three months ended June 30, 2022, the Company generated total revenue of $17.56 million composed of retail revenue of $10.95 million and cultivation/distribution revenue of $6.61 million. This compared to total revenue of $2.87 million for the quarter ended June 30, 2021, which included retail revenue of $2.32 million and cultivation/distribution revenue of $0.55 million. This was an increase of 511.0% in total revenue.
• The Company’s gross profit for the three months ended June 30, 2022 was $8.27 million, compared to a gross profit of $2.72 million for the three months ended June 30, 2021, an increase of $5.55 million or 204.0%.
• The merger with UMBRLA and the acquisitions of People’s First Choice and SilverStreak Solutions in 2021 led to more operations with additional facilities, employees, and costs to support them. Selling, general and administrative expenses for the three months ended June 30, 2022 were $19.07 million, compared to $4.70 million for the three months ended June 30, 2021, an increase of $14.37 million or 305.9%. For the three months ended June 30, 2022, amortization and depreciation expenses increased by $2.56 million over the three months ended June 30, 2021, facilities related expenses, such as rent, utilities, repairs and maintenance, security, and insurance, increased by $2.89 million over second quarter of 2021. Taxes, licensing and permitting increased by $1.17 million. Advertising increased by $0.73 million. Employee related expenses increased by $3.93 million or 382%.
• The Company realized an operating loss of $67.07 million for the three months ended June 30, 2022 compared to an operating loss of $1.97 million for the three months ended June 30, 2021, an increase of $65.09 million or 3,298.5%. This increase was attributed primarily to a $55.73 million charge for impairment of intangible assets and goodwill related to the UMBRLA and People’s acquisitions.

About Unrivaled Brands

Unrivaled Brands is a multi-state vertically integrated company focused on the cannabis sector with operations in California and Oregon. In California, Unrivaled Brands operates dispensaries, direct to consumer delivery, a state-wide distribution network, company-owned brands, and two cultivation facilities. In Oregon, we operate a state-wide distribution network, company-owned brands and outdoor and greenhouse cultivation. Unrivaled Brands is home to Korova, the market leader in high potency products across multiple product categories, currently available in California, Oregon, Arizona, and Oklahoma, as well as Sticks and Cabana.

For more info, please visit: https://unrivaledbrands.com.

Cautionary Language Concerning Forward-Looking Statements

Certain statements contained in this communication regarding matters that are not historical facts, are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as the PSLRA. These include statements regarding management’s intentions, plans, beliefs, expectations, or forecasts for the future, and, therefore, you are cautioned not to place undue reliance on them. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by law. We use words such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “will,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “guidance,” and similar expressions to identify these forward-looking statements that are intended to be covered by the safe-harbor provisions of the PSLRA. Such forward-looking statements are based on our expectations and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements due to a number of factors.

New factors emerge from time-to-time and it is not possible for us to predict all such factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. These risks, as well as other risks associated with the combination, will be more fully discussed in our reports with the SEC. Additional risks and uncertainties are identified and discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed from time to time with the SEC. Forward-looking statements included in this release are based on information available to Company as of the date of this release. The Company undertakes no obligation to update such forward-looking statements to reflect events or circumstances after the date of this release.

Contact
Jason Assad
LR Advisors LLC.
[email protected]
678-570-6791

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

CALGARY, AB, Aug. 18, 2022 /PRNewswire/ – Decibel Cannabis Company Inc. (the “Company” or “Decibel”) (TSX-V: DB) (OTCQB: DBCCF), a premium cannabis producer, is pleased to announce its second quarter financial results for the three and six month periods ending June 30, 2022.

“Our second quarter results continue to demonstrate that Decibel is on the path we projected in our 2022 operational outlook”, said Paul Wilson, Chief Executive Officer of Decibel. “Our New Unique and Innovative product development and revenue generating initiatives have once again produced quarter-over-quarter record performance. This progress has been compounded by our productivity initiatives and record gross profit, now resulting in positive cash flow, putting us on track for another projected milestone.”

“With more highlights scheduled for the back half of 2022, Decibel is delivering exactly what we’ve planned and forecasted to the market, ourselves, and our shareholders.”

Financial Highlights

• Record Net Revenue: $18.6 million of total net revenue in Q2, with strong sequential growth of 11% over Q1 2022 and 49% over Q2 2021. Net revenue growth was driven by expanded distribution particularly in the Ontario market, the continued launch of new General Admission and Qwest infused products in various provinces and continued growth in demand for derivative products. During the second quarter, net revenue would have been $18.9 million, however $320 of discounts were provided related to discontinued products.
• Record Gross Margin Before Fair Value Adjustments: Significant sequential improvement to 41% in Q2, compared to 35% in Q1 2022 and 41% in Q2 2021. The increase was driven by initiatives realized midway through the second quarter, including operational efficiencies, automation equipment commissioned, and sourcing of more cost-effective components related to the manufacturing of cannabis products. The cost engineering initiatives and capital investments impacted the later part of the second quarter, with additional equipment landed early August expected to drive continued sequential margin expansion. The Company achieved its previously stated target of 40 – 45% gross margin ahead of the second half of 2022.
• Record Adjusted EBITDA: Record $3.2 million of adjusted EBITDA in Q2, with strong growth of 31% over Q1 2022 and 49% over Q2 2021. This marks Decibel’s eighth quarter of consecutive quarterly positive adjusted EBITDA.
• Derivative Sales: $13.0 million of net sales in Q2, with strong sequential growth of 25% over Q1 2022 and 128% over Q2 2021. The increase in sale of wholesale extracts is primarily attributable to expanded distribution, the launch of a new infused product line, and continued growth in demand for vapes and concentrates. This demand growth trend is continuing into Q3 2022 with record level demand and distribution for Decibel derivative products.
• Flower Sales: $3.4 million of net sales in Q2, a sequential decline of 19% over Q1 2022 and 10% over Q2 2021. During the period, sale of flower products was driven by reduced volumes during planned infrastructure optimization at the Thunderchild Facility.
• Record National Market Share³: Achieved 4.5% market share in July 2022, growth of 70% year over year.
• Cash Flow from Operations: $1.8 million of cash flow from operations in Q2, a sequential decrease of $1.2 million over Q1 2022 and an improvement of $4.8 million over Q2 2021. This marks Decibel’s second consecutive quarter of positive cash flow from operations.
• Repayment Convertible Debentures: On May 11, 2022, the Company repaid its 9.5% convertible debentures with the draw-down of a fixed 4.75% $12 million term loan. This extends the maturity date of $12 million of debt by 4 years, avoids approximately 6% of potential shareholder dilution, and results in $0.6 million of annual interest expense savings.

Operating Highlights

New Unique and Innovative

The Company launched or expanded distribution of the following products in the quarter:

• Total of 26 products launched in various provinces over the course of Q2 2022
• 6 General Admission flower and pre-roll products
• 6 General Admission vape flavours in distillate and live resin formats
• 9 General Admission and Qwest infused pre-rolls
• 5 Qwest flower and pre-roll products

Capital Projects

The Company made the following progress on its operational initiatives:

• The Plant: Received its Health Canada license May 2, 2022 for Phase 1 of its processing hub expansion. In August 2022, the majority of the automation and other critical equipment was received, which is expected to drive further margin enhancement on Decibel products in the second half of 2022.
• Thunderchild: Completed its staged infrastructure optimization to better meet growing demand for Decibel products and enhance product quality and yields. Production volumes are expected to resume full run-rate production by the first half of 2023.

Summary Highlights

Link to Decibel’s Investor Presentation

Decibel’s financial statements for the three and six month periods ending June 30, 2022 (“Financial Statements”) and related Management’s Discussion & Analysis (“MD&A”), are available under the Company’s profile at www.sedar.com. As of June 30, 2022, Decibel was in compliance with all of its financial covenants and expects to remain in compliance for the remainder of its twelve-month forecast period.

About Decibel

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three operating production houses along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada. Thunderchild Cultivation, is a licensed and operating 80,000 square foot indoor cultivation facility in Battleford, SK. The Plant, Decibel’s extraction facility, in Calgary, AB has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, Blendcraft, and General Admission, into new and innovative product formats like concentrates, vapes, edibles and beyond.

www.decibelcc.com

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statement Regarding Certain Non-GAAP Measures

This press release contains certain financial performance measures that are not recognized or defined under IFRS (termed “Non-GAAP Measures”). As a result, this data may not be comparable to data presented by other licenced producers and cannabis companies. For an explanation of these measures to related comparable financial information presented in the Consolidated Financial Statements prepared in accordance with IFRS, refer to the discussion below. The Company believes that these Non-GAAP Measures are useful indicators of operating performance and are specifically used by management to assess the financial and operational performance of the Company. Accordingly, these Non-GAAP Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Non-GAAP Financial Measures

Adjusted EBITDA: Adjusted EBITDA is a non-GAAP financial measure that is intended to provide a proxy for the Company’s operating cash flow and is widely used by industry analysts to compare Decibel to its competitors and derive expectations of future financial performance of the Company. Adjusted EBITDA increases comparability between comparative companies by eliminating variability resulting from differences in capital structures, management decisions related to resource allocation, and the impact of fair value adjustments on biological assets, inventory, and financial instruments, which may be volatile on a period to period basis. The composition of adjusted EBITDA is as follows:

Supplementary Financial Measures

Retail Sales: Retail Sales is a measure intended to provide a more accurate depiction of the revenue earned by the Company’s retail operations. Inventory transferred directly from the Company’s wholesale operations to the Company’s retail operations is removed from Retail Revenue as presented in the Company’s Consolidated Financial Statements.

Gross Sales of Flower: Gross Sales of Flower is a measure intended to provide a more accurate depiction of gross revenue earned by the Company’s wholesale flower operations. Inventory transferred directly from the Company’s wholesale flower operations to the Company’s retail operations is added to Gross Wholesale Revenue of Flower as found in the Company’s Consolidated Financial Statements to arrive at Gross Sales of Flower.

Net Sales of Flower: Net Sales of Flower is a measure intended to provide a more accurate depiction of net revenue earned by the Company’s wholesale flower operations. Excise taxes associated with flower sales are subtracted from Gross Sales of Flower to arrive at Net Sales of Flower.

Gross Sales of Extracts: Gross Sales of Extracts is a measure intended to provide a more accurate depiction of gross revenue earned by the Company’s wholesale extracts operations. Inventory transferred directly from the Company’s wholesale extracts operations to the Company’s retail operations is added to Gross Wholesale Revenue of Extracts as found in the Company’s Consolidated Financial Statements to arrive at Gross Sales of Extracts.

Net Sales of Extracts: Net Sales of Extracts is a measure intended to provide a more accurate depiction of net revenue earned by the Company’s wholesale extracts operations. Excise taxes associated with extracts sales are subtracted from Gross Sales of Extracts to arrive at Net Sales of Extracts.

Forward Looking Information

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.

In this news release, forward-looking statements relate to, among other things, the Company’s expectations that it is on track with another projected milestone and that more highlights are planned for the back half of 2023; that additional equipment landed early August will drive continued sequential margin expansion; that the Company is ahead of its previously stated target to achieve 40-45% gross margin by the second half of 2022; that the growth in demand for vapes and concentrates will continue into Q3 2022 with record level of demand and distribution for Decibel derivative products; the anticipated benefits to be derived from the staged infrastructure optimization at the Thunderchild Facility; Decibel’s expectations that production volumes at the Thunderchild Facility will resume full run-rate production by the first half of 2023; the Company’s expectations that it will remain in compliance with all of its financial covenants for the remainder of its twelve-month forecast period; the Company’s ability to grow Qwest, Qwest Reserve and Blendcraft brands into new and innovative product formats, variations; and its other business plans and expectations. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. The Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

Forward-looking statements and FOFI (as defined herein) are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to delays; regulatory changes and impacts; capital requirements; construction impacts; displacement requirements and unforeseen requirements resulting from the COVID-19 pandemic; the ability to obtain and maintain licences to retail cannabis products; review of the Company’s production facilities by Health Canada and maintenance of licences (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; timing and completion of construction and expansion of the Company’s production facilities and retail locations; the risk that additional equipment landed early August may not drive continued sequential margin expansion; the risk that the Company may not remain in compliance with all of its financial covenants for the remainder of its twelve-month forecast period; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSX Venture Exchange, as applicable. Many of these risks and uncertainties and additional risk factors are described in the Corporation’s Annual Information Form and Management’s Discussion and Analysis for the year ended December 31, 2021, which are available at www.sedar.com.

With respect to forward-looking statements and FOFI contained in this press release, Decibel has made assumptions regarding, but not limited to: Decibel’s ability to enter new markets and industry verticals; Decibel’s ability to attract, develop and retain key personnel; Decibel’s ability to raise additional capital and to execute on its expansion plans; the timelines for new product launches, Decibel’s ability to continue investing in infrastructure and implement scalable controls, systems and processes to support its growth; the impact of competition; the changes and trends in Decibel’s industry or the global economy; the Company’s ability to generate sufficient cash flow from operations and obtain financing, if needed, on acceptable terms or at all; the general economic, financial market, regulatory and political conditions in which the Company operates; the ability of the Company to ship its products and maintain supply chain stability; consumer interest in the Company’s products; anticipated and unanticipated costs; government regulation of the Company’s activities and products; the timely receipt of any required regulatory approvals; the Company’s ability to conduct operations in a safe, efficient and effective manner; the Company’s construction plans and timeframe for completion of such plans; and the changes in laws, rules, regulations, and global standards.

Any financial outlook or future oriented financial information (in each case “FOFI”) contained in this news release regarding prospective financial position, including, but not limited to: that additional equipment landed in early August will drive continued sequential margin expansion; and that the Company is ahead of its previously stated target to achieve 40-45% gross margin by the second half of 2022, is based on reasonable assumptions about future events, including those described above, based on an assessment by management of the relevant information that is currently available. The actual results will likely vary from the amounts set forth herein and such variations may be material.

Readers are cautioned that the foregoing list of assumptions and risk factors is not exhaustive. The forward-looking statements and FOFI contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements and FOFI included in this news release are made as of the date hereof and Decibel does not undertake any obligation to publicly update such forward-looking statements and FOFI to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

– Eighth Consecutive Quarter of Year-Over-Year Revenue Growth –

– Initial Mary Jones Cannabis Product Launch Beats Internal Expectations and Generates Enthusiastic Consumer Feedback and Demand –

SEATTLE, Aug. 04, 2022 (GLOBE NEWSWIRE) — Jones Soda Co. (CSE: JSDA, OTCQB: JSDA) (“Jones Soda” or the “Company”), the original craft soda known for its unconventional flavors and user-submitted photo labels, announced its financial results for the second quarter ended June 30, 2022.

Second Quarter 2022 Financial Highlights vs. Year-Ago Quarter

• Revenue increased 35% to $6.0 million compared to $4.5 million.
• Gross profit as a percentage of revenue was 28.0% compared to 31.3%.
• Net loss was $1.4 million, or $(0.02) per share, compared to a net income of $0.3 million, or $0.00 per share.
• Adjusted EBITDA¹ was $(1.1) million compared to $0.4 million. Adjusted EBITDA included approximately $1.2 million in expenses related to the development and roll-out of the Company’s new cannabis products during the second quarter of 2022.

Management Commentary

“We continued to capitalize on the strong momentum we started the year with, resulting in our eighth consecutive quarter of year-over-year revenue growth,” said Mark Murray, President and CEO of Jones Soda. “Our core bottled soda business was the main driver behind our solid sales results, where we saw continued strength in our retail and alternative channels throughout the quarter. While we experienced modest year-over-year margin compression mostly due to a combination of product mix and inflationary pressures, we remained in-line with our internal expectations for this quarter. I am very proud of our team’s ability to adapt under a dynamic macro-environment and continue to execute on our three-year strategic turnaround plan.

“Our strong sales performance continues to validate the three-year plan we implemented in late 2020. We continue to improve the health of our business by supporting and growing our core retail presence, while also opening new points of distribution in alternative channels. Through deeper engagement with existing relationships and several additional distribution agreements in these new channels, our customer base is larger, more diversified, and we believe more sustainable. We will continue to support this progress with a strong focus on improving our product mix and ensuring we have the right products on customers’ shelves at the right times. In addition, our marketing team continues to drive velocity and deliver high returns on our marketing investments. With a special release flavor set to debut in the coming months and our AR labels driving higher engagement rates within the Jones Soda community, we believe our sales and marketing strategies continue to define the Company and strategically position us for long-term, profitable growth across all our channels.

“I am also pleased to report that we are receiving overwhelmingly positive feedback from our initial Mary Jones cannabis launch. Having secured strong manufacturing and distribution partnerships during the second quarter of 2022, we believe we are in an excellent position to fulfill the anticipated high demand we have already begun generating. Our attention-grabbing launch sets the stage for more exciting products scheduled to be released in the coming months. We believe our full cannabis product portfolio featuring our 100mg beverage and innovative format edibles will help improve our sales margins, while satisfying consumer and retail demand for products with higher potency, portability and versatility. We intend to continue to establish our position within the cannabis space by expanding into new markets and further developing the Mary Jones brand into a household name.

“With the strong foundation that we have built in our core soda business and the foothold we hope to secure in the cannabis market, we expect to continue executing on our turnaround strategy for the remainder of the year. Although the macro-economy can be unpredictable and we are keeping a close eye on consumer demand in an inflationary environment, we remain committed to executing upon initiatives within our control. We will continue to support our growth in alternative channels, develop new and innovative flavors that engage with the Jones Soda community, and capitalize on the momentum we are generating with the launch of Mary Jones. As we work to further establish Jones Soda as a leading craft soda and cannabis company, the expansion of the Jones brand and the realization of value back to our shareholders remains our highest priority.”

Second Quarter 2022 Financial Results

Revenue in the second quarter of 2022 increased 35% to $6.0 million compared to $4.5 million in the prior year period. The revenue growth was primarily attributable to sustained growth in the Company’s retail and alternative sales channels for its core bottled business.

Gross profit as a percentage of revenue was 28.0% for the second quarter of 2022 compared to 31.3% in the year-ago period. The decrease in gross profit margin was primarily driven by the impacts of inflation, mostly driven by increased material and freight costs, and the overall impacts of product mix for the quarter.

Net loss for the second quarter of 2022 was $1.4 million, or $(0.02) per share, compared to a net income of $0.3 million, or $0.00 per share, in the second quarter of 2021. The increase in net loss was primarily attributable to the $1.2 million of operating expenses and development costs related to the Company’s strategic entry into the cannabis sector in the current quarter, combined with a one-time $334,500 benefit recorded in the prior year period in connection with the forgiveness of a loan previously granted to the Company under the Payment Protection Program (PPP).

Adjusted EBITDA¹ in the second quarter of 2022 was $(1.1) million compared to $0.4 million the prior year period. The decline was primarily driven by the aforementioned increase in operating expenses associated with the Company’s strategic entry into the cannabis sector and the aforementioned one-time benefit in the prior year period associated with the forgiveness of a loan previously granted to the Company under the PPP.

At June 30, 2022, cash and cash equivalents totaled $9.3 million compared to $4.7 million at December 31, 2021. As of June 30, 2022, all convertible debentures have been converted and the Company does not have any substantial debt.

_______________
¹ Adjusted EBITDA is defined as net income (loss) from operations before interest expense, interest income, taxes, depreciation, amortization and stock-based compensation and is a non-GAAP measure (reconciliation provided below).

Conference Call

Jones Soda will hold a conference call today at 4:30 p.m. Eastern time to discuss its results for the second quarter ended June 30, 2022.

Date: Thursday, August 4, 2022
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: 1-877-545-0523
International dial-in number: 1-973-528-0016
Conference ID: 429299

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Group at 1-949-574-3860.

The conference call will be broadcast live and available for replay here and via the investor relations section of the Company’s website at www.jonessoda.com.

A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through August 18, 2022.

Toll-free replay number: 1-877-481-4010
International replay number: 1-919-882-2331
Replay ID: 46142

Presentation of Non-GAAP Information

This press release contains disclosure of the Company’s Adjusted EBITDA, which is not a United States Generally Accepted Accounting Principle (“GAAP”) financial measure. The difference between Adjusted EBITDA (a non-GAAP measure) and Net Loss (the most comparable GAAP financial measure) is the exclusion of interest expense and income, income tax expense, depreciation and amortization expense and stock-based compensation. We have included a reconciliation of Adjusted EBITDA to Net Loss under “Non-GAAP Reconciliation” at the end of this press release. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to the Company’s GAAP financial measures. Adjusted EBITDA has certain limitations in that it does not take into account the impact of certain expenses to our consolidated statements of operations. In addition, because Adjusted EBITDA may not be calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies. The Company believe that Adjusted EBITDA provides useful information to investors about the Company’s results attributable to operations, in particular by eliminating the impact of non-cash charges related to stock-based compensation, amortization and depreciation that is consistent with the manner in which we evaluate the Company’s performance. These adjustments to the Company’s GAAP results are made with the intent of providing a more complete understanding of the Company’s underlying operational results and to provide supplemental information regarding our current ability to generate cash flow. This non-GAAP financial measure is not intended to be considered in isolation or as a replacement for, or superior to Net Loss as an indicator of the Company’s operating performance, or cash flow, as a measure of its liquidity. Adjusted EBITDA should be reviewed in conjunction with Net Loss as calculated in accordance with GAAP.

About Jones Soda Co.

Jones Soda Co.® (CSE: JSDA, OTCQB: JSDA) is a leading craft soda manufacturer with a growing line of cannabis products. The Company markets and distributes premium craft sodas under the Jones® Soda and Lemoncocco® brands, and a variety of cannabis products under the Mary Jones brand. Jones’ mainstream soda line is sold across North America in glass bottles, cans and on fountain through traditional beverage outlets, restaurants and alternative accounts. The Company is headquartered in Seattle, Washington. For more information, visit www.jonessoda.com, www.myjones.com, www.drinklemoncocco.com or www.MaryJonesCannabis.com.

Forward-Looking Statements Disclosure

Certain statements in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all passages containing words such as “will,” “aims,” “anticipates,” “becoming,” “believes,” “continue,” “estimates,” “expects,” “future,” “intends,” “plans,” “predicts,” “projects,” “targets,” or “upcoming.” Forward-looking statements also include any other passages that are primarily relevant to expected future events or that can only be evaluated by events that will occur in the future. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. Factors that could affect the Company’s actual results, including its financial condition and results of operations, include, among others: its ability to successfully execute on its growth strategies and operating plans for the future; the Company’s ability to continue to effectively utilize the proceeds from its recent financings, including its recent debenture financings, and from the Company’s recently completed plan of arrangement; the Company’s ability to execute its plans to develop and market THC/CBD-infused and/or cannabis-infused beverages and edibles, and comply with the laws and regulations governing cannabis, hemp or related products, and the timing and costs of the development of these new product lines; the Company’s ability to manage operating expenses and generate sufficient cash flow from operations; the Company’s ability to create and maintain brand name recognition and acceptance of its products; the Company’s ability to adapt and execute its marketing strategies, especially in light of the restrictions caused by the COVID-19 pandemic; the Company’s ability to compete successfully against much larger, well-funded, established companies currently operating in the beverage industry generally and in the craft beverage segment specifically; the Company’s ability to respond to changes in the consumer beverage marketplace, including potential reduced consumer demand due to health concerns (including obesity) and legislative initiatives against sweetened beverages (including the imposition of taxes); its ability to develop and launch new products and to maintain brand image and product quality; the Company’s ability to maintain and expand distribution arrangements with distributors, independent accounts, retailers or national retail accounts; its ability to manage inventory levels and maintain relationships with manufacturers of its products; its ability to maintain a consistent and cost-effective supply of raw materials and flavors and manage the impact of the COVID-19 pandemic and other factors on its supply chain; its ability to attract, retain and motivate key personnel; its ability to protect its intellectual property; the impact of future litigation and the Company’s ability to comply with applicable regulations; its ability to maintain an effective information technology infrastructure, fluctuations in freight and fuel costs; the impact of currency rate fluctuations; its ability to access the capital markets for any future equity financing and to manage the impact that the COVID-19 pandemic may have on the Company’s ability to access capital; the Company’s ability to maintain disclosure controls and procedures and internal control over financial reporting; dilutive and other adverse effects from future potential securities issuances; and any actual or perceived limitations by being traded on the OTCQB Marketplace in the United States and the Canadian Securities Exchange in Canada. More information about factors that potentially could affect the Company’s operations or financial results is included in its most recent annual report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”) on March 14, 2022 and in the other reports filed with the SEC since that date. Readers are cautioned not to place undue reliance upon these forward-looking statements that speak only as to the date of this release. Except as required by law, the Company undertakes no obligation to update any forward-looking or other statements in this press release, whether as a result of new information, future events or otherwise.

Company Contact:

Mark Murray
President and CEO
1-206-624-3357

Investor Relations Contact

Cody Cree
Gateway Group, Inc.
1-949-574-3860
[email protected]

JONES SODA CO.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)

JONES SODA CO.
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED

JONES SODA CO.
NON-GAAP RECONCILIATION
(Unaudited, in thousands)

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

Solid Performance Dampened by Australian Floods
Australian Vapes Sales Return to Pre-Natural Disaster Levels in May
Continued Improvements in Canadian Cannabis Operations

TORONTO, July 28, 2022 (GLOBE NEWSWIRE) — Lifeist Wellness Inc. (“Lifeist” or the “Company”) (TSXV: LFST) (FRANKFURT: M5B) (OTCMKTS: NXTTF), a health-tech company that leverages advancements in science and technology to build breakthrough companies that transform human wellness, today reported its financial results for the three and six months ended May 31, 2022 (“Q2 2022”) compared to the same period last year (“Q2 2021”). All financial figures are in Canadian dollars unless otherwise indicated.

Second Quarter 2022 Highlights

• The $0.8 million decrease in net revenue in Q2 2022 was due entirely to two factors: a $1.0 million decrease in Australian Vaporizers hardware revenue caused by the flood-related operational shutdown in March and April and a $0.6 million decline from the planned wind down of hardware sales in Europe through Lifeist Bahamas. Excluding these items, Lifeist revenue would have increased. Canadian cannabis revenue increased by $0.8 million, or 29%, compared to Q2 2021.

• Gross profit before inventory adjustment increased to $0.7 million compared to $0.4 million in Q2 2021, with margins expanding to 16% from 7%, despite the loss of two months of sales by Australian Vaporizers.
• The $0.9 million improvement in Adjusted EBITDA loss in Q2 2022 was driven by a $2.0 million improvement at CannMart and a $0.8 million reduction in Corporate & Other costs, which more than offset a $1.1 million decline at Australian Vaporizers due to the one-time impact of the flood, $0.7 million at Mikra due to start-up costs, and $0.1 million decline at Lifeist Bahamas. Excluding the one-time impact of the flood, Adjusted EBITDA would have improved by $2.0 million.
• Working capital position of $13.0 million at quarter end remains strong.

“The Australian floods dampened what was otherwise a solid quarter for Lifeist,” said Meni Morim, CEO of Lifeist. “While it’s been a difficult period for the broader cannabis industry, we’re generating measurable success and establishing a path to profitability for our recreational cannabis distribution platform. Meanwhile, while encountering industry-wide supply chain disruption challenges, our nutraceuticals business was still able to achieve the correct acquisition and retention metrics to enable profitable growth and I expect this execution in the coming quarters. As for Australian Vaporizers, following the effects of the devastating flood, the business re-opened its doors in May and generated sales operating metrics consistent with pre-shutdown levels, and that normally positive performance has continued into fiscal Q3 2022.”

Mr. Morim continued, “I’m especially proud of how our Australian colleagues executed in the wake of an unpresented flood which crippled the Brisbane region and Australian Vaporizers’ operations. In just 53 days after waking up to two feet of water in the warehouse, Australian Vaporizers re-launched sales from a new larger facility and has returned to its growth trajectory – an amazing accomplishment. The team is now focused on growth strategies to increase Australian Vaporizers’s contribution of revenue to Lifeist.”

Concluded Mr. Morim, “Additionally, we took further steps in our transition to a wellness-driven company by divesting Findify, securing a deal that gave Lifeist 100% cash upfront to solidify our balance sheet, and further focusing the business. This follows our previous exit from consumer-focused medical cannabis and formally ceasing operations of Lifeist Bahamas, which sold hardware in Europe through the everyonedoesit.uk ecommerce website. With these initiatives, we are more focused and better capitalized to fund our growth initiatives in our core areas of focus, B2B recreational cannabis and nutraceuticals, where we see significant value creation for our stakeholders.”

Operating Highlights

Cannabis (CannMart Inc. (“CannMart”) and CannMart Labs Inc. (“CannMart Labs”))

• Recreational cannabis continues to be Lifeist’s largest driver of performance accounting for 86% of the Company’s net revenue in Q2 2022, with growing gross margins, effective inventory management, an expanded distribution network, and bringing an award-winning brand to market.
• The cannabis B2B gross margin increased to $0.7 million in Q2 2022 as compared to a negative gross margin of $0.4 million in Q2 2021, continuing the positive trend, driven by sales of higher-margin Roilty products and improved overhead efficiencies.
• After establishing a supply agreement with the Société Québécoise du Cannabis (“SQDC”) in March 2022, CannMart is now approved for the sale of cannabis and cannabis-derived products from provincial and territorial bodies in Ontario, Alberta, British Columbia, Quebec, Manitoba, New Brunswick, Saskatchewan, Yukon, Nunavut and the Northwest Territories, which provides it with access to 95% of Canada’s population. CannMart is currently processing purchase orders for the country’s largest provinces.
• At CannMart Labs, the proprietary Roilty brand shipped to Ontario last week and is also now listed in British Columbia where it has been shipped and selling within the province. With the expansion of distribution to these two additional provinces, Roilty is now available in six Canadian provinces and territories, Alberta, Saskatchewan, Manitoba, Yukon, Nunavut, and Northwest Territories, four of which are being fed products produced at Labs’ facility in Etobicoke, Ontario. To meet increasing demand, CannMart Labs continues to add capacity, processing flash frozen and dried biomass through its extraction units.
• In total, there are now 10 Roilty SKUs in the market, with Roilty vapes performing particularly well, as are Roilty live resin products such as Priest Punch, Kings Kush and Lemon Haze. Having seen solid traction for co-manufactured shatter, Labs has begun commercial scale runs of Labs-produced shatter which it expects to be in market by fiscal Q3 2022.

Nutraceuticals (Mikra)

• Mikra had a milestone quarter in Q2 2022. Its first product, CELLF, a novel cellular therapeutic targeting systemic fatigue, began pre-sales in March, followed by the first shipments in April. Mikra spent the bulk of these months testing messaging and channels for scaling marketing effectively in the coming quarters while simultaneously undergoing product development and margin-increasing R&D for its flagship product, CELLF.
• Mikra encountered unanticipated supply chain disruption challenges due to the war in Ukraine, resulting in increased costs and lead times for Glycerin, Sunflower Oil, and MCT Oil. These unforeseen circumstances required Mikra to identify new vendors and undergo complete re-testing, pushing scale-up manufacturing behind schedule and rendering nearly 30% of Q2 2022 out-of-stock and 50% to date. Mikra has surmounted these challenges and has now officially received Batch #3 and expecting Batch #4, #5, and #6 in the coming weeks to continue to meet current consumer demand and scale revenues.
• Mikra was able to test multiple marketing channels and demonstrate a strong product-market-fit with key metrics despite considerable delays in the supply chain. To date, the average 30-day churn on U.S. subscriptions has maintained below 20%, and customer acquisition cost has reduced by 61% since March. These two critical metrics and stable supply chain efforts will enable Mikra to scale more heavily in the coming quarters.
• Mikra anticipates accelerating sales of CELLF as it ramps up marketing activities and expands distribution channels. CELLF is currently available for purchase on WeAreMikra.com.

Australian Vaporizers

• Due to a severe and unprecedented storm flooding in Queensland and New South Wales, Australian Vaporizers’ solid year-to-date performance and growth was put on hold during March and April 2022.
• This regional natural disaster was leveraged by management to implement a plan to overhaul Australian Vaporizers’ operations to enable accelerated business growth. This included a five-year lease on a larger, more efficient layout—including a delivery bay for increased receiving and shipping efficiency necessary for order scale.
• In May, Australian Vaporizers’ first full operational month of back-to-normal operations, the business delivered metrics consistent with pre-shutdown levels, demonstrating its resiliency, loyal customer base, and market opportunity. May was characterized by strong website traffic, conversion rates and average order values (AOVs).
• In Q2 2022, Australian Vaporizers revenue decreased by $1.0 million or 68%, as compared to the same period last year, due to the operational shut down for March and April 2022, following the flooding event in the area. In addition, Australian Vaporizers recorded a write-down of inventory of $0.6 million, as a result of the flood damage, impacting its Q2 2022 Adjusted EBITDA and EBITDA.

Financial Summary

Net revenue decreased 15% to $4.1 million in Q2 2022 compared to $4.9 million in Q2 2021. The $0.8 million decrease was driven by a decline of $1.0 million in Australian Vaporizers hardware revenue due to the flood-related operational shutdown in March and April and a $0.6 million decline due to the planned wind down of hardware sales in Europe through Lifeist Bahamas, which more than offset an $0.8 million increase in Canadian recreational cannabis and the initial contribution of Mikra and CannMart Labs revenue.

Gross margin was $0.7 million (16% of net revenue) in Q2 2022 compared to $0.4 million (7%) in Q2 2021, and $1.5 million (17%) in Q2 2022YTD compared to $0.5 million (5%) in Q2 2021YTD, representing a significant increase over the same period last year in both dollars and %. The increase in Gross Profit in Q2 2022 represents the Company’s fourth highest quarterly Gross Profit, despite the loss of two months of sales by Australian Vaporizers.

Adjusted EBITDA loss was $4.5 million in Q2 2022 compared to a loss of $5.4 million in Q2 2021. The $0.9 million improvement, or 17%, was driven by a $2.0 million improvement at CannMart and a $0.8 million reduction in Corporate & Other costs, which more than offset a $1.1 million decline at Australian Vaporizers due to the impact of the flood, $0.7 million at Mikra due to start-up costs, and $0.2 million decline at Lifeist Bahamas.

Net loss was $3.9 million in Q2 2022 compared to $6.4 million in Q2 2021, due to improved gross margins, lower operating expenses, and a gain on sale of $0.9 million in the quarter from the disposition of the Company’s subsidiary Findify AB on May 25, 2022.

Balance Sheet and Cash Flow

Cash and cash equivalents were $6.6 million as of May 31, 2022, compared to $12.6 million as of November 30, 2021.

Inventories increased to $6.5 million at May 31, 2022 compared to $5.4 million at November 30, 2021, mainly due to new inventory purchased for CannMart Labs and Mikra, both which started their own production in Q1 2022.

Net cash used in operations was $7.1 million in Q2 2022 compared to $6.3 million in Q2 2021. The increase was due the business interruption at Australian Vaporizers during Q2 2022 and investments in emerging businesses including CannMart Labs and Mikra.

Additional Information

The Company’s complete financial statements and management’s discussion & analysis (“MD&A”) for Q2 2022 are available on Lifeist’s website (www.lifeist.com) and SEDAR (www.sedar.com).

About Lifeist Wellness Inc.

Sitting at the forefront of the post-pandemic wellness revolution, Lifeist leverages advancements in science and technology to build breakthrough companies that transform human wellness. Portfolio business units include: CannMart, which operates a B2B wholesale distribution business facilitating recreational cannabis sales to Canadian provincial government control boards; CannMart Labs, a BHO extraction facility for the production of high margin cannabis 2.0 products; the CannMart.com marketplace, which provides U.S. customers with access to hemp-derived CBD and smoking accessories; Australian Vapes, Australia’s largest online retailer of vaporizers and accessories; and Mikra, a biosciences and consumer wellness company seeking to develop innovative therapies for cellular health.

Information on Lifeist and its businesses can be accessed through the links below:

www.lifeist.com
www.cannmart.com
www.australianvaporizers.com.au
www.wearemikra.com

Contacts
Lifeist Wellness Inc.
Meni Morim, CEO
Matt Chesler, CFA, Investor Relations
Ph: 647-362-0390
Email: [email protected]

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release or has in any way approved or disapproved of the contents of this press release.

Non-IFRS Financial Measures

Management evaluates the Company’s performance using a variety of measures, including “Net loss before income tax, depreciation and amortization” and “Adjusted EBITDA”. The non-IFRS measures discussed below should not be considered as an alternative to or to be more meaningful than revenue or net loss. These measures do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS.

The Company believes these non-IFRS financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of the Company.

Management uses these and other non-IFRS financial measures to exclude the impact of certain expenses and income that must be recognized under IFRS when analyzing consolidated underlying operating performance, as the excluded items are not necessarily reflective of the Company’s underlying operating performance and make comparisons of underlying financial performance between periods difficult. From time to time, the Company may exclude additional items if it believes doing so would result in a more effective analysis of underlying operating performance. The exclusion of certain items does not imply that they are non-recurring.

(i) Current and deferred income taxes, depreciation and amortization, and share-based compensation were excluded from the Adjusted EBITDA calculation as they do not represent cash expenditures.
(ii) Other income consisting of gain on disposal of subsidiary, interest income, realized gain on disposition of AFS investments, unrealized gain on derivatives and other miscellaneous non-recurring income were excluded from Adjusted EBITDA calculation.
(iii) Non-recurring costs related to restructuring and legacy issues were excluded from Adjusted EBITDA calculation.
(iv) Impairment loss relating to goodwill, customer list, domains and brand names were excluded from Adjusted EBITDA calculation.
(v) Impairment loss relating to receivable is a provision for expected credit loss to an associate and was excluded from Adjusted EBITDA calculation.
(vi) Share of associates loss, net of tax, is excluded due to lack of control.

Forward Looking Information

This news release contains “forward-looking information” within the meaning of applicable securities laws. All statements contained herein that are not historical in nature contain forward-looking information. Forward-looking information can be identified by words or phrases such as “may”, “expect”, “likely”, “should”, “would”, “plan”, “anticipate”, “intend”, “potential”, “proposed”, “estimate”, “believe” or the negative of these terms, or other similar words, expressions and grammatical variations thereof, or statements that certain events or conditions “may” or “will” happen.

The forward-looking information contained herein, including, without limitation, statements related to: the Company’s continuing focus on B2B recreational cannabis and nutraceuticals and its expectations from such businesses to deliver sustained and tangible shareholder value are made as of the date of this press release and is based on assumptions management believed to be reasonable at the time such statements were made, including, without limitation, Lifeist’s ability to continue to increase revenue through its B2B recreational cannabis business and to maintain momentum of expanding its nutraceutical business, its ability to broaden its total addressable market and to evolve into a recognized wellness company, the Company’s expectation that the nutraceutical and wellness market will develop as currently anticipated, the nutraceutical market will continue to be a multi-billion dollar high-margin market, the introduction of new products and brands will generate additional revenue, expectations that CELLF and other cellular health products and accessories to be developed by the Company will gain market acceptance along with the expansion of the market for nutraceutical products, as well as other considerations that are believed to be appropriate in the circumstances. While we consider these assumptions to be reasonable based on information currently available to management, there is no assurance that such expectations will prove to be correct. By its nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond our control, could cause actual results to differ materially from the forward-looking information in this press release. Such factors include, without limitation: the inability of the Company to develop its business as anticipated and to increase revenues and/or its profitable margin on such revenues, unanticipated changes to current regulations that would adversely impact the Company’s businesses, the unanticipated decline in demand for cannabis products, competition from others, unforeseen developments that would impede Mikra’s ability to sell CELLF and any other developed nutraceutical products as anticipated and in a timely manner, the risk that pre-clinical trials relating to CELLF are not as successful as anticipated and do not demonstrate the expected therapeutic benefits and/or fail to strengthen the Company’s patent claim, the risk that the expected demand for nutraceutical products in general and those of Mikra in particular does not develop as anticipated, the failure to maintain the churn rate of subscription sales of CELLF at anticipated levels, regulatory risk, risks relating to the Company’s ability to execute its business strategy and the benefits realizable therefrom and risks specifically related to the Company’s operations. Additional risk factors can also be found in the Company’s current MD&A and annual information form, both of which have been filed under the Company’s SEDAR profile at www.sedar.com. Readers are cautioned not to put undue reliance on forward-looking information. The Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

Source: Lifeist Wellness Inc.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

– Stoker’s continues to gain share with Zig-Zag’s US rolling papers and e-commerce subsegment recording another quarter of double digit growth

LOUISVILLE, Ky., July 27, 2022–(BUSINESS WIRE)–Turning Point Brands, Inc. (“TPB” or “the Company”) (NYSE: TPB), a manufacturer, marketer and distributor of branded consumer products, including alternative smoking accessories and consumables with active ingredients, announced today financial results for the second quarter ended June 30, 2022.

Q2 2022 vs. Q2 2021

• Net sales decreased 16.1 percent to $102.9 million
  • Combined net sales for Zig-Zag and Stoker’s Products demonstrated resilience decreasing 0.9 percent for the quarter
  • NewGen net sales declined by 45.1 percent (declined 2.1 percent sequentially)
• Gross profit decreased 14.2 percent to $51.5 million
• Net income decreased 64.7 percent to $5.4 million
• Adjusted EBITDA decreased 17.6 percent to $24.7 million (see Schedule A for a reconciliation to net income)
• Diluted EPS of $0.30 and Adjusted Diluted EPS of $0.70 as compared to $0.73 and $0.84 in the same period one year ago, respectively (see Schedule B for a reconciliation to Diluted EPS)

“We are pleased with the stable performance of both the Zig-Zag and Stoker’s segments during the quarter in light of a heightened inflationary environment for our customers with rising prices at the pump impacting consumer traffic in convenience stores. While overall sales decreased 16 percent from the previous year, Zig-Zag and Stoker’s sales were steady despite weakness in the wraps and loose leaf subsegments. Zig-Zag maintained its leading positions in both the roll-your-own paper and cigar wraps markets while Stoker’s MST experienced accelerated share gains driven by consumer trade-down to the value category. Despite NewGen revenue decreasing 45 percent from last year, the segment remained relatively stable from the previous quarter and profitable as we continue to monitor FDA regulatory developments,” said Yavor Efremov, President and CEO. “We continued to deploy a substantial amount of our free cash flow towards share repurchases during the quarter while maintaining a strong balance sheet providing us with optionality on further capital deployment.”

Mr. Efremov concluded, “Going forward, we maintain a favorable outlook on our underlying business and our competitive positioning. However, given the market environment during the second quarter, along with continued inflationary pressures and resulting uncertainty of consumer confidence, we feel it is prudent to adjust our outlook for the year.”

Zig-Zag Products Segment (45 percent of total net sales in the quarter)

For the second quarter, Zig-Zag Products remained broadly in-line with a record performance in 2021 with net sales decreasing 2.1 percent to $46.2 million against a tough comparable period when sales increased 72.3 percent in the prior year period. TPB’s U.S. rolling papers and e-commerce business, and its Canadian business both grew double-digits. However, this was offset by a decline in the cigar wraps business driven partially by a trade inventory reduction during the current period compared against a trade inventory load in the prior year period. Wild Hemp sales moved into the Zig-Zag Products segment during the current year period, which contributed $0.2 million, or 0.4 percent to segment sales. For the second quarter, total Zig-Zag Products segment volume decreased 2.3 percent, while price / mix increased 0.2 percent.

For the quarter, the Zig-Zag Products segment gross profit decreased 4.7 percent to $26.4 million. The segment’s gross margin declined 160 basis points to 57.2 percent driven primarily by strong growth in lower gross margin products.

“Paper cones and Zig-Zag’s e-commerce business once again drove the growth within our U.S. papers business,” said Graham Purdy, Chief Operating Officer. “Our wraps business saw a double-digit decline due to a tough comparable against a trade inventory load in the prior year period. We are excited to have recently launched distribution of CLIPPER lighters which we expect to ramp up through the second half of the year.”

Stoker’s Products Segment (33 percent of total net sales in the quarter)

For the second quarter, Stoker’s Products net sales increased 0.7 percent to $33.6 million. MST grew mid-single digits but was offset by a decline in loose-leaf chewing tobacco. MST represented 65 percent of Stoker’s Products revenues in the quarter, up from 62 percent a year earlier. FRE nicotine pouch products’ sales moved into the Stoker’s Products segment during the current year period and contributed $0.2 million or 0.5 percent to segment sales. For the second quarter, total Stoker’s Products segment volume decreased 6.1 percent, while price / mix increased 6.8 percent.

For the quarter, the Stoker’s Products segment gross profit decreased 0.4 percent to $18.1 million. The segment’s gross margin contracted 60 basis points to 53.8 percent due to an inventory write-down of certain FRE products due to rationalization of the product line ahead of the regulatory filing deadline. The segment’s gross margin expanded 80 basis points excluding FRE.

“Stoker’s continued to outperform the market with share gains in both the MST and loose-leaf chewing tobacco categories during the quarter,” continued Purdy. “With the current inflationary environment accelerating the secular down-trading trends in the industry, Stoker’s remains well positioned within its categories as a leading value brand.”

NewGen Products Segment (22 percent of total net sales in the quarter)

For the second quarter, NewGen Products net sales decreased 45.1 percent to $23.1 million. The regulatory environment for the vape businesses continues to impact sales.

For the quarter, the NewGen Products segment gross profit decreased 50.6 percent to $7.0 million. The segment gross margin contracted 340 basis points from the previous year to 30.1 percent due to product mix and the competitive environment.

“Despite another challenging quarter further impacted by new regulation around synthetic nicotine products, our vape business remained profitable,” concluded Purdy. “Meanwhile, our distribution capabilities continued to improve through the quarter as we position our business for a post-PMTA environment while our vapor products’ applications remain under FDA review.”

Performance Measures in the Second Quarter

Second quarter consolidated selling, general and administrative (“SG&A”) expenses were $33.3 million compared to $35.1 million in the second quarter of 2021.

The second quarter SG&A included the following notable items:

• $0.3 million of restructuring expenses compared to none in the previous year
• $0.9 million of ERP / CRM scoping expenses and duplicative system costs compared to none in the previous year
• $1.5 million of stock options, restricted stock and incentive expense compared to $2.8 million in the year-ago period
• $0.4 million of transaction expenses compared to $0.7 million in the year-ago period
• $2.0 million of FDA PMTA-related expenses compared to $0.6 million in the year-ago period
• $1.6 million from the accounting consolidation of Turning Point Brands Canada compared to $1.1 in the year-ago period with the increase driven by the inclusion of a full quarter of the DVW acquisition in the current period

Total gross debt as of June 30, 2022 was $422.5 million. The corresponding net debt (total gross debt less cash) at June 30, 2022 was $315.1 million. The Company ended the quarter with total liquidity of $128.8 million, comprised of $107.4 million in cash and $21.4 million of revolving credit facility capacity.

During the quarter, the Company spent $8.8 million to repurchase 301,662 shares at an average price of $29.16 per share. The Company also recorded an additional impairment of $6.3 million during the quarter related to its investment in dosist.

2022 Outlook

Due to the uncertain macro environment and slower than expected improvement in our NewGen Products segment, the Company now expects the following full-year 2022 results:

• Zig-Zag Products sales of $193 to $200 million (compared to previous outlook of $193 to $203 million)
• Stoker’s Products sales of $127 to $133 million
• Consolidated adjusted EBITDA of $97 to $103 million

Earnings Conference Call

As previously disclosed, a conference call with the investment community to review TPB’s financial results has been scheduled for 8:30 a.m. Eastern on Wednesday, July 27, 2022. Investment community participants should dial in 10 minutes ahead of time using the toll-free number 888-330-2502 (international participants should call 240-789-2713), and follow the audio prompts after typing in the event ID: 6640134. A live listen-only webcast of the call will be available on the Events and Presentations section of the investor relations portion of the Company website (www.turningpointbrands.com). A replay of the webcast will be available on the site two hours following the call.

Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with generally accepted accounting principles in the United States (GAAP), this press release includes certain non-GAAP financial measures including EBITDA, Adjusted EBITDA, Adjusted diluted EPS and Adjusted Operating Income. A reconciliation of these non-GAAP financial measures accompanies this release.

About Turning Point Brands, Inc.

Turning Point Brands (NYSE: TPB) is a manufacturer, marketer and distributor of branded consumer products including alternative smoking accessories and consumables with active ingredients through its iconic Zig-Zag® and Stoker’s® brands, and its emerging brands within the NewGen segment. TPB’s products are available in more than 215,000 retail outlets in North America, and on sites such as www.zigzag.com and www.solacevapor.com. For the latest news and information about TPB and its brands, please visit www.turningpointbrands.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as “anticipate,” “believe,” “expect,” “intend,” “plan” and “will” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As a result, these statements are not guarantees of future performance and actual events may differ materially from those expressed in or suggested by the forward-looking statements. Any forward-looking statement made by TPB in this press release, its reports filed with the Securities and Exchange Commission (the “SEC”) and other public statements made from time-to-time speak only as of the date made. New risks and uncertainties come up from time to time, and it is impossible for TPB to predict or identify all such events or how they may affect it. TPB has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws. Factors that could cause these differences include, but are not limited to those included it the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed by the Company with the SEC. These statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995.

Financial Statements Follow: