Vext Reports Financial Results for Q3 2023

Generated revenue of $8.1 million and Adjusted EBITDA ¹of $1.1 million.
Reported 14 ^thconsecutive quarter of positive EBITDA ¹and positive Adjusted EBITDA ¹
Recorded cash flow from operations of $3.8 million YTD, marking 13 out of 14 consecutive quarters of positive cash flow from operations.
On November 16 ^th, closed the sale of Prescott Valley cultivation facility, generating $6.5 million in cash.
Closed private placement on October 12 ^thfor net proceeds of $11.5 million, with insiders purchasing over 60% of the offering.
Announced definitive agreements to acquire two additional retail dispensaries in Ohio on October 16 ^th. On closing, Vext will have an operating Tier I cultivation facility, an operating manufacturing facility, and four dispensaries in Ohio ², which is expected to transition to an adult-use market in 2024.

Vancouver, British Columbia–(Newsfile Corp. – November 28, 2023) – Vext Science, Inc. (CSE: VEXT) (OTCQX: VEXTF) (“Vext” or the “Company”) a U.S.-based cannabis operator with vertical operations in Arizona and Ohio, today reported its financial results for the period ended September 30, 2023. All currency references used in this news release are in U.S. currency unless otherwise noted.

Summary Financial Results

	Q3 2023	Q2 2023	Q3 2022
Revenue	$8,099,285	$9,187,122	$7,673,101
Gross margin before impact of biological assets (%)¹	39%	30%	60%
EBITDA¹	$404,358	$2,264,980	$2,814,551
Adjusted EBITDA¹	$1,076,949	$1,049,114	$3,278,860
Adjusted EBITDA margin (%)¹	13.3%	11.4%	42.7%

Management Commentary

Eric Offenberger, CEO of Vext, commented, “Q3 was another challenging period for all U.S. retailers, and cannabis was no exception. In an already seasonally slow period for Arizona, the consumer remained stretched, which led to continued pressure on retail price points and smaller baskets year-over-year. Despite these ongoing challenges, our team translated effective promotions into solid growth in traffic, and transactions. This enabled our stores to perform better than the market and we estimate the additional share will position us well as consumer discretionary spending improves. Furthermore, we expect first harvest out of our Eloy facility in Q1 2024 and with the sale of our Prescott Valley facility subsequent to the end of the quarter, we are focused on maximizing the sell-through of our own product through our owned retail stores and with the goal to improve Adjusted EBITDA margins over the next several quarters.”

“We are particularly pleased with recent developments in the Ohio market. Shortly after the end of the quarter, Ohio voted to legalize adult-use cannabis. As one of the top ten states in the U.S. by population, it is expected to become a $4 billion market within the next four years³. Our recently announced Ohio Expansion Transaction, once closed, will bring Vext to four dispensaries in the state and position us both to capture significant growth as Ohio launches and to sustain that growth as the market matures. We now have strategic vertical footprints in Arizona and Ohio and all major capex in both states is either complete or fully funded. Through 2024, our team will remain focused on building significant shareholder value through continued growth in market share and profitability in Arizona, while capturing a meaningful share of the large Ohio market as it transitions to adult-use in the new year,” added Mr. Offenberger.

Summary of Recent Announcements

On November 16, 2023, the Company announced that it had completed the previously announced sale of its cultivation facility located in Prescott Valley, Arizona to affiliates of Elevate Cannabis Co. for $6.5 million in cash.
On October 16, 2023, the Company announced that it has reached agreement pending a regulatory review period on an asset purchase agreement (the “Asset Purchase Agreement”), together with other definitive agreements, with Big Perm’s Dispensary Ohio, LLC (“Big Perm”) and the members thereof, to acquire two cannabis dispensaries located in Ohio (the “Dispensaries”) owned by Big Perm, as well as all licenses and assets related to the business of the Dispensaries, for aggregate consideration of approximately $9.4 million, subject to adjustment in certain circumstances. The regulatory review period has since expired and the Asset Purchase Agreement was formally executed on October 27, 2023.
On October 12, 2023, the Company announced that it had completed a non-brokered private placement of $11.5 million through the issuance of 67,647,058 common shares of the Company at a price of $0.17 per Common Share, including the full exercise of a $1.5 million over-allotment option.
On October 4, 2023, the Company announced that it has completed the acquisition of Appalachian Pharm Processing, LLC, an Ohio limited liability company, together with its subsidiaries and affiliated companies.

Q3 2023 Financial Results Conference Call

Vext will also host a conference call and webcast on Tuesday, November 28, 2023 at 8:00 a.m. ET to discuss its third quarter financial results.

Date: November 28, 2023 | Time: 8:00am ET
Participant Dial-in: 416-915-3239 or 1-800-319-4610
Replay Dial-in: 1-800-319-6413
Conference ID: 10022744
Playback #: 0563 (Expires on December 12, 2023)
Listen to webcast:https://www.gowebcasting.com/13095

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