Investor Presentation
Disclaimer
Definition and Reconciliation of Non-GAAP Measures
In addition to reporting the financial results in accordance with generally accepted accounting principles in the United States ("GAAP"), the Company reports certain
financial results that differ from what is reported under GAAP. Non-GAAP measures used by management do not have any standardized meaning prescribed by
GAAP and may not be comparable to similar measures presented by other companies. The Company believes that certain investors and analysts use these measures
to measure a company's ability to meet other payment obligations or as a common measurement to value companies in the cannabis industry, and the Company
calculates Adjusted Gross Profit and Adjusted Gross Profit Margin as Gross Profit and gross profit margin adjusted for certain material non-cash items including the one-
time relief of fair value of inventory on acquisition, non-cash write downs of inventory, sales returns and write downs of inventory as a result of a vape recall in
Pennsylvania, and other one-time adjustments to gross profit that management does not believe are reflective of ongoing operations. We calculate Adjusted EBITDA
from continuing operations and Adjusted EBITDA Margin from continuing operations as EBITDA from continuing operations adjusted for certain material non-cash items
such as inventory write downs outside of the normal course of operations, share based compensation expense, impairment charges taken on goodwill, intangible
assets and property and equipment, the gain or loss recognized on the revaluation of our contingent consideration liabilities, one-time write off of accounts
receivable related to one customer that was deemed uncollectible, loan modification fees related to the modification of debt, the gain recognized on the
extinguishment of debt, the gain or loss recognized on the remeasurement of the fair value of the U.S denominated preferred share warrants, one time fees incurred in
connection with our acquisitions and certain other adjustments management believes are not reflective of the ongoing operations and performance. Such
information is 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. The Company believes this definition is a useful measure to assess the performance of the Company as it provides more meaningful
operating results by excluding the effects of expenses that are not reflective of the Company's underlying business performance and other one-time or non-recurring
expenses.
Please refer to the tables in our earnings release and Form 10-Q for the period ending September 30, 2023 as posted in the Investors section of our website for a
reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures. The Company encourages investors to consider its
GAAP results alongside its supplemental non-GAAP measures, and to review the reconciliation between GAAP results and non-GAAP measures that is included at the
end of this presentation.
Third Party Information
Certain information contained in this presentation and statements made orally during the related earnings webcast relate to or are based on studies, publications,
surveys and other data obtained from third-party sources and the Company's own internal estimates and research. While the Company believes these third-party
studies, publications, surveys and other data to be reliable as of the date of this presentation, the Company has not independently verified, and makes no
representations as to the adequacy, fairness, accuracy or completeness of, any information obtained from third-party sources. In addition, no independent source
has evaluated the reasonableness or accuracy of the Company's internal estimates or research and no reliance should be made on any information or statements
made in this presentation relating to or based on such internal estimates and research.
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