Vext Announces Continued Growth in Q1 2022

May 30, 2022

• Revenue of $10.8 million, +16% sequentially 
• Adjusted EBITDA of $3.9 million, + 15% sequentially
• Cash flow from operations of $3.1 million
• The Company will hold a conference call and webcast on Tuesday, May 31, 2022 at 8am ET to review its financial results.

VANCOUVER, BC, May 30, 2022 /CNW/ – Vext Science, Inc. (“VEXT” or the “Company”) (OTCQX: VEXTF) (CSE: VEXT) a cannabinoid brand leader based in Arizona, leveraging its core expertise in extraction, manufacturing, cultivation and marketing to build a profitable multi-state footprint, today reported its financial results for the period ended March 31, 2022. All currency references used in this news release are in U.S. currency unless otherwise noted.

Summary Financial Results (unaudited)

Management Commentary 

Eric Offenberger, CEO of Vext commented, “Q1 marked an excellent start to the year for Vext, as our team continued to invest in targeted promotions, while maintaining solid gross margins. An efficient operating model, product positioning and category focus will continue to be key success factors in 2022 as consumer-facing industries grapple with the impact of inflation on consumer discretionary income. Vext’s operating model, which has been designed to maintain rigorous cost control, generated growth in Adjusted EBITDA of 15% compared to Q4. Many brands are aimed at the high end of the market, and while there is room for those, our Vapen line of products, which consistently ranks as one of Arizona’s leading brand portfolios, is positioned to deliver high quality at a price that represents consistent value and delivers profitability to the Company.”

Mr. Offenberger continued, “We expect the remainder of 2022 to be an important period for Vext, as we continue to grow in Arizona, and initiate further expansion in Ohio, beginning with the expected approval of our first dispensary license in the state, through a joint venture, during the summer. Despite macro challenges, the current market environment will continue to present opportunities for Vext. We are positioned to gain market share as other operators struggle, backed by a strong balance sheet, ongoing cash flow generation, and a team that has proven its ability to execute. We will take the right steps to continue building loyalty with our customers, and value for our shareholders.”

Summary of Recent Operating Developments

• As of January 1, 2022, Vext transitioned from a not-for-profit operating and accounting framework to a for-profit framework in the state of Arizona. Previously, the Company operated two dispensaries in Phoenix and as of Q1 2022, Vext now has ownership of these dispensaries and they are reflected on its balance sheet. In addition, during Q1, Vext brought the biological assets of the dispensaries on to its balance sheet under IAS 41.
• Senior financial and operations executive Daniel Engel joined the Company on May 2, 2022, as the Company’s CFO.
• In Q1, the Company completed expansions of its cultivation facility in Prescott Valley, bringing Vext’s total indoor cultivation footprint to 24,000 square feet.

Q1-2022 Financial Results Conference Call

Vext will host a conference call and webcast on Tuesday, May 31, 2022 at 8am ET to discuss its first quarter financial results.

Date: May 31, 2022 | Time: 8:00am ET
Participant Dial-in: 416-764-8609 or 888-390-0605
Replay Dial-in: 416-764-8677 or 1-888-390-0541
Conference ID: 07179410
Playback #: 179410 (Expires on June 14, 2022)
Listen to webcast:https://bit.ly/3GquaGE 

For more details, visit Vext’s investor website or contact the IR team at investors@vextscience.com.

Non-IFRS Financial Measure

The Company has provided certain non-IFRS financial measures including “Gross margin”, “Adjusted EBITDA” and “Adjusted EBITDA margin”. These non-IFRS financial measures do not have a standardized definition under IFRS, nor are they calculated or presented in accordance with IFRS and may not be comparable to similar measures presented by other companies. The Company defines “Gross margin” as Gross Profit divided by Revenue. The Company defines “Adjusted EBITDA” as net income (loss) from operations, as reported, before interest and tax, adjusted to exclude extraordinary items, non-recurring items, other non-cash items, including stock-based compensation expense, depreciation and amortization, foreign exchange and acquisition related costs, if applicable. The Company defines “Adjusted EBITDA margin” as Adjusted EBITDA divided by Revenue.

The Company has provided these non-IFRS financial measures as supplemental information and in addition to the financial measures that are calculated and presented in accordance with IFRS. The Company believes that these supplemental non-IFRS financial measures provide a valuable additional measure to use when analyzing the operating performance of the business. These supplemental non-IFRS financial 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 IFRS financial measures presented herein. The following tables provide a reconciliation of each of the non-IFRS measures to its closest IFRS measure.

The following information provides reconciliations of the supplemental non-IFRS financial measure presented herein to the most directly comparable financial measure calculated and presented in accordance with IFRS.

Gross Margin Before Impact of Biological Assets and Adjusted Gross Margin

Gross Margin Before Impact of Biological Assets is defined as: Gross Profit Before Impact of Biological Assets, divided by Revenue.

Adjusted Gross Margin is defined as: Gross Margin Before Impact of Biological Assets, adjusted for one-time inventory fair value adjustment, divided by Revenue.

Adjusted EBITDA