HASH Simply Solventless Concentrates Ltd

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CALGARY, AB, Nov. 21, 2024 /CNW/ - Simply Solventless Concentrates Ltd. (TSXV: HASH) ("SSC") is pleased to announce its Q3 2024 results have exceeded the guidance provided on September 17, 2024, with record gross revenue of $7,175,617, adjusted EBITDA of $1,004,542, and normalized net income ("NNI") of $923,479. Year to date ("YTD"), SSC generated annualized NNI of $0.06 per share. The information set out in this press release should be read in conjunction with SSC's financial statements as at and for the three and nine months ended September 30, 2024 and the related management's discussion and analysis, which are available for review on SSC's SEDAR+ profile at www.sedarplus.ca. Adjusted EBITDA and NNI are non-IFRS measures. See discussion in the Non-IFRS Financial Measures advisories section of this press release below.

SSC's Q3 2024 results are the first quarter to include the operations of CannMart Inc. ("CannMart"), the acquisition of which closed on September 12, 2024; however, they do not include the operations of ANC Inc. ("ANC"), the acquisition of which closed on October 18, 2024 (and will therefore be included in SSC's Q4 2024 results).

SSC also announces the exercise of its right (the "Acceleration Right") to accelerate the expiry of approximately 8,000,000 of SSC's remaining common share purchase warrants that have an exercise price of $0.40 per warrant (the "$0.40 Warrants"), which are currently set to expire on July 17, 2026, for expected proceeds of up to approximately $3.2 million (assuming all of the remaining $0.40 Warrants are exercised). Following the exercise of the Acceleration Right, any remaining unexercised $0.40 Warrants will expire on December 21, 2024.

The proceeds from the exercise of the $0.40 Warrants will be used to fund the outstanding promissory note payments pursuant to the acquisition of ANC and for working capital purposes aimed at expanding revenue.

Jeff Swainson, President & CEO of SSC, stated: "Q3 2024 was another transformational quarter for SSC as we closed an oversubscribed $3.85 million financing, closed the CannMart acquisition, integrated CannMart's operations, announced the acquisition of ANC, and again exceeded quarterly guidance.  In the last three quarters we have profitably increased gross revenue from $7.0 million in the fiscal year 2023 to $28.6 million annualized in Q3 2024, a growth rate of 309%, with annualized Q3 2024 NNI of $0.06 per share. More importantly, we are working hard to achieve another strong quarter in Q4 2024, which will include the operations of both CannMart and ANC. We will issue Q4 2024 guidance in the near future."

Q3 2024 Financial Highlights:

• Q3 2024 YTD Annualized NNI⁽¹⁾ per Share: For the nine months ended September 30, 2024, annualized NNI per common share of $0.06 (six months ended June 30, 2024, annualized NNI per common share - $0.06). As noted, these results do not include the operations of ANC. 
• Q3 2024 Gross Revenue: $7,175,617 (Q2 2024 - $4,232,663), an increase of 70%.
• Q3 2024 Net Revenue: $4,948,898 (Q2 2024 - $2,902,206), an increase of 71%.
• Q3 2024 Gross Margin: $1,963,180 (Q2 2024 - $1,720,920), an increase of 14%.
• Q3 2024 Adjusted EBITDA: $1,004,542 (Q2 2024 - $952,986), an increase of 5%.
• Q3 2024 NNI⁽¹⁾: $923,479 (Q2 2024 - $890,815), an increase of 4%. 
• Q3 2024 Working Capital⁽¹⁾: $11,610,122 (Q2 2024 - $5,909,655), an increase of 96%.
• Q3 2024 Inventory Turnover: 0.84x (Q2 2024 – 0.43x), an improvement of 95%.
• Q3 2024 Current Ratio: 2.39x (Q2 2024 – 1.74x), an improvement of 37%.

Q3 2024 Corporate Highlights:

• CannMart Acquisition: On June 25, 2024, SSC announced the acquisition of CannMart. On September 12, 2024, SSC closed the acquisition of CannMart.
• $0.25 Unit Financing: On July 16, 2024, SSC closed an over subscribed financing, issuing 15,400,000 units, each unit comprised of one common share and one-half of one common share purchase warrant, at a price of $0.25 per unit for gross proceeds of $3,850,000.
• ANC Inc. Acquisition: On September 26, 2024 SSC announced the acquisition of ANC. On October 18, 2024, SSC closed the ANC acquisition.
• Warrant Exercises: On October 28, 2024 SSC announced that approximately 14,844,910 warrants expiring in August 2026 had been exercised, or were in the process of being exercised, for proceeds of $2,968,982. 

Please see TABLE 1 below for a summary of SSC's quarterly EBITDA, adjusted EBITDA, net income, and normalized net income per quarter:

The financial information in this press release has been reviewed and approved by the board of directors of SSC.

About Simply Solventless Concentrates Ltd.

SSC is a public company incorporated under the Business Corporations Act (Alberta). SSC's mission is to provide pure, potent, terpene-rich ready to consume cannabis products to discerning cannabis consumers. For more information regarding SSC, please see www.simplysolventless.ca.

Notice on Forward Looking Information

This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "will", "estimates", "believes", "intends", "expects", "projected" and similar expressions which are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward looking statements concerning the release of Q4 2024 guidance and the use of proceeds from the exercise of $0.40 Warrants. SSC cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of SSC, including expectations and assumptions concerning SSC, the ability to realize expected revenue and cost synergies of the transactions with CannMart Inc. on the timelines expected, the risk that the business of CannMart will not be integrated successfully, the ability to maintain relationships with customers, employees and suppliers, the timing and market acceptance of products, competition in SSC's markets, SSC's reliance on customers, fluctuations in interest rates, SSC's ability to maintain good relations with its customers, employees and other stakeholders, changes in law or regulations, SSC's ability to protect its intellectual property, as well as other risks and uncertainties, including those described in SSC's filings available on SEDAR+ at www.sedarplus.ca. The reader is cautioned that assumptions used in the preparation of any forward-looking statements may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of SSC.

The reader is cautioned not to place undue reliance on any forward-looking statements. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

The forward-looking statements contained in this press release are made as of the date of this press release, and SSC does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.

Non-IFRS Financial Measures

This press release includes references to "Working Capital", "EBITDA", "Adjusted EBITDA" and "Normalized Net Income" (NNI), which are not defined under International Financial Reporting Standards (IFRS). The intent of these non-IFRS measures is to provide additional useful information to investors and analysts. These non-IFRS measures do not have a standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other entities. As such, these non-IFRS measures should not be considered in isolation or used as a substitute for measures of performance prepared in accordance with IFRS.

Working Capital is defined as current assets less current liabilities as reported on SSC's consolidated statements of financial position. Working Capital is considered as a useful measure by management of SSC to indicate SSC's ability to service its short-term financial obligations with short-term assets.

EBITDA is calculated as income before interest, taxes, depreciation and amortization expenses. EBITDA is considered as a useful measure by management of SSC to understand the profitability of SSC excluding the effects of capital structure, taxation and depreciation, but may not be appropriate for other purposes.

Adjusted EBITDA is calculated as EBITDA less the sale of SSC's facility and settlement payment(s), plus the acquisition of Dash Capital Corp. and share compensation expense. Adjusted EBITDA is considered as a useful measure by management of SSC to understand the profitability of SSC excluding the effects of certain non-operating items.

Normalized Net Income (NNI) is calculated as income less the sale of SSC's facility and settlement payment(s), plus the acquisition of Dash Capital Corp. and share compensation expense. Normalized Net Income is considered as a useful measure by management of SSC to understand the profitability of SSC excluding the effects of certain non-operating items.

The following table reconciles current assets and current liabilities to Working Capital:

The following table reconciles net income (loss) to EBITDA:

The following table reconciles net income (loss) to Adjusted EBITDA:

The following table reconciles net income (loss) to Normalized Net Income:

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

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.

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