Mr. Meni Morim reports

LIFEIST REPORTS FIRST QUARTER 2024 FINANCIAL RESULTS

Lifeist Wellness Inc. has released its financial results for the three months ended Feb. 29, 2024, compared with the same period last year.

First quarter highlights:

• Net revenue from continued operations of $4.9-million in Q1 2024 compared with $5.9-million in Q1 2023;
• Gross profit before inventory adjustment of $1.4-million in Q1 2024, representing gross margin of 27 per cent, compared with $1.5-million, or 25 per cent gross margin, in Q1 2023;
• Operating costs and professional fees decreased to $3.4-million in Q1 2024 compared with $4.4-million in Q1 2023;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss improved to $2.1-million in Q1 2024 compared with $3.0-million in Q1 2023.

"Our performance in the first quarter of 2024 reflects the challenges of operating in the present regulatory and economic landscape," said Meni Morim, chief executive officer of Lifeist. "While our efforts to focus on premium, higher-margin products and continued operational efficiencies have led to improvements in the bottom line, the quarter reflected a drop in revenue from a year ago. We are taking steps to address structural issues within our operations, and will act on opportunities to increase revenue and drive toward profitability. The teams at CannMart, Aussie Vapes and Mikra are working tirelessly to realize the goal of transforming Lifeist into a sustainable, diversified wellness company."

Financial summary

Net revenue was $4.9-million in Q1 2024 compared with $5.9-million in Q1 2023.

Gross profit before inventory adjustment was $1.4-million in Q1 2024 versus $1.5-million in the same period last year, with margins of 27 per cent in Q1 2024 compared with 25 per cent in Q1 2023.

Adjusted EBITDA loss improved to $2.1-million in Q1 2024 compared with $3.0-million in Q1 2023, and net loss from continuing operations improved to $2.5-million, or 0.4 cent per diluted share, in Q1 2024, compared with a loss of $3.3-million, or 0.7 cent per diluted share, in Q1 2023. The improvement in both adjusted EBITDA loss and net loss was due largely to operational efficiencies and the resulting reduction in operating costs of $1.1-million in Q1 2024 versus 2023.

Balance sheet and cash flow

Cash and cash equivalents were $1.6-million at Feb. 29, 2024, compared with $1.5-million at Nov. 30, 2023.

Inventories were $3.3-million at Feb. 29, 2024, compared with $4.5-million at Nov. 30, 2023.

The working capital position was negative $2.4-million at Feb. 29, 2024.

Net cash provided by operations was $400,000 in Q1 2024 compared with net cash provided by operations of $2.2-million in Q1 2023.

New chief financial officer appointed

Lifeist also announces the appointment of Joshua Hone to the position of chief financial officer of the company, effective April 30, 2024. Mr. Hone was promoted from his current position of controller and is replacing John Sinclair, who took on the position of interim CFO in September, 2023.

Mr. Hone is a chartered professional accountant and brings over 14 years of progressive financial leadership to the company with extensive experience working with multientity organizations across diverse industries. Mr. Hone is thoroughly qualified in financial planning, modelling and analysis, operations, reporting and regulatory compliance, and change management. Mr. Hone will focus his efforts on accelerating growth and forging a path to sustained profitability to create shareholder value.

The board of directors would like to thank Mr. Sinclair for his financial leadership and his many contributions as interim CFO of Lifeist. Mr. Sinclair will remain a member of the board of directors and chair of the audit committee.

Additional information

The company's complete financial statements and management's discussion and analysis for the three months ended Feb. 29, 2024, are available on Lifeist's website and SEDAR+.

About Lifeist Wellness Inc.

Sitting at the forefront of the postpandemic wellness revolution, Lifeist leverages advancements in science and technology to build breakthrough companies that transform human wellness. Portfolio business units include: Mikra, a bioscience and consumer wellness company developing and selling innovative products for cellular health; CannMart, which operates a business-to-business wholesale distribution business facilitating recreational cannabis sales to Canadian provincial government control boards including for CannMart Labs, a BHO extraction facility producing high-margin cannabis 2.0 products; and Australian Vapes, one of Australia's largest on-line retailers of vaporizers and accessories.

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