Mr. Paul Rosen reports

1933 INDUSTRIES REPORTS FIRST QUARTER 2024 FINANCIALS AND ANNOUNCES THE ISSUANCE OF NEW DEBENTURE

1933 Industries Inc. has released its unaudited interim consolidated financial statements for the three months ended Oct. 31, 2023, and 2022 (Q1 2024). All amounts expressed are in Canadian dollars.

The company owns 91 per cent of Alternative Medicine Association (AMA), the company's cultivation and production subsidiary focused on the medical and adult-use cannabis market, and 100 per cent of consumer packaged goods manufacturer Infused MFG LLC. The company's revenue is derived from wholesale cannabis sales in Nevada (AMA), and from the sale of hemp-derived wellness products (Infused) under the Canna Hemp brand sold across the United States via e-commerce on the Canna Hemp website.

Q1 2024 financial highlights:

• Total revenues of $5.5-million;
• Gross margin of $3.9-million before fair value adjustments;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) income of $100,000;
• Top five selling cannabis brand in Nevada.

Management commentary

"We are pleased to report revenues of $5.5-million, as well as operational improvements in gross profit and positive adjusted EBITDA compared to the same period last year. As a non-dispensary house brand, AMA products have strong market presence in several categories and consistently rank among the top five brands sold in Nevada. Our ability to offer a large variety of quality cannabis products with assured consistency and that meet changing consumer demands has made AMA a sought-after brand," said Paul Rosen, chairman and chief executive officer of the company.

Q1 2024 consolidating operating highlights

Revenues

During Q1 2024, the company recorded revenues of $5.5-million, an 11-per-cent increase from $5-million for Q1 2023. The strong performance is attributed to the improvements to the cultivation facility that were completed during Q4 2023.

Gross profit

For the three-month period ended Oct. 31, 2023, gross profit was $3.9-million before fair market adjustments. Gross profit, after fair market adjustments, was $1.7-million for Q1 2024, compared with $500,000 during the same period in 2023.

Expenses

During the reporting period, expenses were $2.1-million compared with $1.2-million for Q1 2023. The increase in expenses was primarily due to prior-period receiving payroll tax refunds from the Internal Revenue Service of $500,000 and recovery of a fair value adjustment related to Infused MFG inventory of $400,000.

Net loss

For Q1 2024, net loss and adjusted EBITDA were a loss of $400,000 and an income of $100,000, respectively, compared with a loss of $1.2-million and an income of $30,967, respectively, for Q1 2023.

Convertible debenture update

The company also announces the extinguishment upon maturity of the principal debt of its 10 per cent senior unsecured convertible debentures due Dec. 31, 2023 (the historical debentures), excluding interest in arrears, through the issuance of a new 10 per cent unsecured convertible debenture, as per a recently approved resolution by debenture holders. With a two-year maturity, the new debenture will be convertible into units at a price of five cents per unit. Each unit will comprise one common share of the company and one share purchase warrant. Each share purchase warrant is exercisable into one common share of the company at an exercise price of five cents for a period of five years from the date of issuance of the new debenture, subject to certain acceleration provisions. Mr. Rosen added, "We are encouraged by our steady progress towards profitability and are hopeful and optimistic that over the two-year period, overall market conditions will improve."

The distribution of the new debentures will be conducted pursuant to the company's Canadian base shelf prospectus dated Nov. 17, 2022. A prospectus supplement relating to the distribution will be filed in the provinces of British Columbia, Alberta, Saskatchewan and Ontario. The base shelf prospectus is available, and the prospectus supplement will be available under the company's profile on SEDAR+.

Holders of record of historical debentures on Dec. 29, 2023, being the last business day prior to the maturity of the historical debentures, will exchange their historical debentures for new debentures, except in jurisdictions where the new debentures may not be distributed. A letter of transmittal will be sent by the trustee for the historical debentures, Odyssey Trust Company, to the registered debenture holders providing instructions to surrender the certificates evidencing the historical debentures for replacement certificates representing the new debentures.

Accrued and unpaid interest due under the historical debentures of approximately $1,294,000 will be paid in common shares of the company, as permitted in accordance with their terms, as a price of five cents per share resulting in the issuance of an aggregate of 25.88 million shares. The company anticipates that the settlement of the debentures would occur upon or shortly following the maturity date, subject to Canadian Securities Exchange approval.

Further details of the amendments are contained in the management information circular filed under the company's profile on SEDAR+ and on the company's website.

Please note the next financial release dates in accordance with the continuous disclosure schedule set out by the British Columbia Securities Commission.

About 1933 Industries Inc.

1933 Industries is a Nevada-based company, focusing on the cultivation and manufacturing of a large portfolio of cannabis consumer packaged goods in a variety of formats for both the wholesale and retail markets. Its product offerings through its in-house brands include: wholesale flower, prerolls and extracted products under the AMA and Level X brands for the Nevada market; and Canna Hemp, a national cannabidiol (CBD) brand of wellness products that includes tinctures, gummies, topicals and sports recovery products. The company owns 91 per cent of Alternative Medicine Association and 100 per cent of Infused.

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