SLANG Worldwide Announces First Quarter 2023 Financial Results (2023)

EBITDA of $0.68 million in the first quarter of 2023 compared to $2.36 million in the first quarter of 2022¹

Achieved positive cash flow from operating activities in the first quarter of 2023 for the second consecutive quarter and is on track to generate positive cash flow from operating activities in the second quarter of 2023^1,2

First Quarter 2023 Adjusted Gross Profit of $5.68 million (52% Adjusted Gross Margin) Compared to $3.64 Million (43% Adjusted Gross Margin) in First Quarter 2022, an increase of 56%¹

Toronto, Ontario — (Newsfile Corp. — 24 maja 2023 r.) —Slang Global Corporation. (CSE：SLNG) (OTC market code: SLGWF) ("explain" or "Business”), a leading global consumer packaged goods (CPG) company with a diverse portfolio of popular brands, today announced its financial results for the three months ended March 31, 2023. All figures are in Canadian dollars.

"SLANG's FY2023 first quarter results once again demonstrate the strength of SLANG's business model and our ability to thrive and create a diversified financial position in the most competitive cannabis market in the country. Operating in an agile and scalable manner, Competing effectively in each of the specific cannabis markets in which we operate, we achieved positive adjusted EBITDA, our first quarter of positive EBITDA, the second consecutive quarter of positive operating cash flow, and our highest ever adjusted quarterly profit 52%. We expect this positive momentum to continue into FY 2023 as we continue to improve our market position and continue to deliver top- and bottom-line results,” commented SLANG CEO John Moynan.

"Our core Vermont and Colorado markets continued to exceed expectations, with solid sales growth driven by our portfolio of leading brands. In fact, we had the fastest sales growth in Colorado in the first quarter, with sales up 12% year-over-year. We Being able to continue to generate high margins from our core markets, positioning these businesses as the financial backbone of our business, allows us to aggressively drive brand performance in emerging markets across the country," concluded Moynan.

Key operating results and growth drivers for the first quarter of 2023:

• Positive cash flow from operating activities in Q4 of 2022 and Q1 of 2023, achieving positive cash flow from operating activities for two consecutive quarters¹.
• During the first two O.pen promotions in Q1 2023, the company saw a 30-66% year-over-year increase in sales for its top 5 most-traded accounts. This is driven by a new strategic marketing approach in 2023 that focuses on structured, brand-based promotions during key sales periods throughout the year.
• Bringing O.pen and Alchemy Naturals to the Vermont wholesale market presents a significant near-term growth opportunity.
• In April 2023, the Company entered the new West Virginia market through strategic partnerships with leading brands and premium cannabis operators.

First Quarter 2023 Financial Highlights

• Income from continuing operations for the three months ended March 31, 2023 was $10.82 million, compared to $8.37 million for the three months ended March 31, 2022, an increase of 29% year-over-year. The increase was primarily driven by a $2.05 million increase in sales in core Vermont and a $0.78 million increase in Colorado, offset by lower sales in emerging markets. Growth in Vermont is driven by the opening of the company's CERES Collaborative Dispensary on October 1, 2022, Vermont's first recreational cannabis store.
• Gross profit for the first quarter of 2023 was $5.72 million (53% gross margin), compared to $3.66 million (44% gross margin) in the first quarter of 2022, an increase of 56% year-over-year. Adjusted gross profit¹First quarter 2023 of $5.68 million (52% adjusted gross margin), compared to $3.64 million (43% adjusted gross margin) in first quarter 2022, an increase of 56% annually.
• EBITDA¹$0.68 million in the first quarter of 2023, compared to ($2.36 million) in the first quarter of 2022. The improvement in EBITDA was primarily due to an increase in gross profit of $2.06 million and a decrease in share-based payments of $0.55 million. Further reductions in operating expenses such as consulting and subcontracting also contributed to the improvement in EBITDA.
• Adjusted EBITDA¹$0.74 million in the first quarter of 2023, compared to ($1.64 million) in the first quarter of 2022. The improvement in Adjusted EBITDA was primarily due to an increase in gross profit of $2.04 million before fair biological asset value adjustments. Further reductions in operating expenses such as consulting and subcontracting also contributed to the improvement in Adjusted EBITDA.
• Cash and restricted cash was $11.67 million as of March 31, 2023 and $11.92 million as of December 31, 2022. Excludes deferred cash consideration of $0.33 million paid for the Company's acquisition of High Fidelity Inc. (“HiFi”), a company that was cash flow positive from operating activities for the three months ended March 31, 2023¹.

First Quarter 2023 Financial Review

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards. Below is a selected presentation of the income statement for the three months ended March 31, 2023.

See the company's management discussion and analysis for the three months ended March 31, 2023 (“Q1 2023 Management and Analysis") detail reconciled EBITDA and adjusted EBITDA and operating income/(loss). SLANG and MD&A's financial statements for the first quarter of 2023 are available on SEDAR's website atwww.carder.comand on the company's investor relations websitewww.slangww.com.

Measures other than IFRS

EBITDA, Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Margin and Operating Cash Flow are non-IFRS financial measures that companies use to evaluate their operating performance. EBITDA is defined as net profit (loss) before net finance costs, income tax expense (gain) and depreciation costs. Management defines Adjusted EBITDA as EBITDA adjusted for other non-monetary items, such as unrealized fair value, share-based compensation costs, impairments, one-time gains and losses, and the impact of one-time income and expenses. Management defines adjusted gross profit as gross profit before adjusting for the fair value of biological assets. Management defines adjusted gross margin as the gross margin before adjusting for the fair value of biological assets. Pursuant to the agreement and the amended merger plan dated June 25, 2021, management defines operating cash flow as the cash flow of the business, excluding milestone payments related to the Company's acquisition of HiFi. These figures are provided for additional information, they are not IFRS measures and do not have any standard IFRS meaning. Companies use these non-IFRS measures to provide shareholders and others with additional measures of operating performance. The Company also believes that these non-IFRS measures are routinely used by securities analysts, investors and other stakeholders to evaluate the Company, many of which report similar measures in their earnings reports. Because other companies may calculate these non-IFRS measures differently than the Company, these measures may not be comparable to similarly titled measures reported by other companies. Readers are cautioned that Adjusted EBITDA should not replace the determination of net loss as a measure of operating performance or as a substitute for cash flow from operating and investing activities. During 2022, the company updated its definition of Adjusted EBITDA to include the fair value amount recognized in inventory sold and the effect of unrealized gains on changes in the fair value of biological assets. Comparative figures for 2021 have been updated to align with presentation for the current period.

Conference Call Details

Management plans to hold an investor conference call today (May 24) at 10:00AM ET to discuss the results.

timing: Wednesday, May 24^upright, 2023 at 10:00 AM EST
connect: 1(888) 440-5983 (US toll-free) or 1(646) 960-0202 (international)
meeting number: 6291438
webcast: The live webcast is available through the company website atwww.slangww.comrublehttps://events.q4inc.com/attendee/413638362

About SLANG around the world

SLANG Global is a leader in cannabis packaged branded consumer products with a diverse portfolio of five different brands and products located throughout the United States. SLANG operates in 13 legal cannabis markets across the country, focusing on sourcing and developing market-proven regional brands, as well as launching innovative new brands to capitalize on global market opportunities and respond to changing consumer tastes. The company has over a decade of operating experience in the emerging and highly regulated cannabis industry, and its partners benefit from this experience by having access to the SLANG playbook for successful operations, sales and marketing. A strong lineup of products from uniquely positioned and scalable brands such as O.pen, Alchemy Naturals, Ceres, Firefly, and partnerships with brands such as Greenhouse Seed Company have been successful with brands consistently ranking high in the states where SLANG works. to know more informationslangww.com.

forward-looking statement

This press release contains "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements or developments of the industry to be different from the expected results, performance or developments expressed or implied in such forward-looking statements There are significant differences in achievement in the future. Forward-looking statements are statements that are not historical facts and are typically, but not always, identified by words such as "anticipates," "plans," "anticipates," "believes," "intends," "estimates," "projects," and similar words. ”, “potentially” and similar expressions, or events or conditions that “will”, “may”, “may”, “may” or “should” occur.

Forward-looking statements are necessarily based on estimates and assumptions which, while current management of SLANG believes that these estimates and assumptions are reasonable, are by their nature subject to significant business, economic and competitive risks, uncertainties and unforeseen circumstances, which Circumstances could cause actual results to differ from those expressed or implied in such statements. Investors are cautioned not to place undue reliance on forward-looking statements. Applicable risks and uncertainties include, but are not limited to, regulatory risk, risks related to the global COVID-19 pandemic, changes in laws, resolutions and guidance, market risk, concentration risk, operating history, competition, international and foreign-related Risk Q1 2023 Operational and other types identified in the "Risk Factors" column of the MD&A and other disclosure documents provided in the company profile on the SEDAR websitewww.carder.com. SLANG undertakes no obligation and expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

financial outlook

This press release contains financial projections within the meaning of applicable Canadian securities laws. The financial forecast has been prepared by company management to provide a forecast of the company's operating cash flow for the three months ending June 30, 2023 and may not be suitable for any other purpose. Financial projections have been prepared based on a number of assumptions, including those discussed in the "Forward-Looking Statements" section. The Company's actual results of operations for any period may differ from the amounts stated in these forecasts, and such deviations may be material. The Company and its management believe that the financial forecasts have been prepared on a reasonable basis. However, because this information is highly subjective and subject to numerous risks, including those discussed in the "Forward-Looking Statements" section, it should not be relied upon as an indication of future performance.

third party information

This press release contains market and industry data obtained from third-party sources, including industry publications. The Company believes industry data to be accurate and its estimates and assumptions are reasonable, but does not guarantee the accuracy or completeness of such data. Third-party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but cannot guarantee the accuracy or completeness of the information contained therein. Although data are believed to be reliable, the Company has not independently verified any data from outside sources mentioned in this release, nor has it confirmed the underlying economic assumptions upon which such sources are based.

Company contact information
Mikel Rutherford, Chief Financial Officer
833-752-6499

Media and Investor Inquiries
Inwestorzy@SLANGww.com

KCSA Strategic Communications
Fira Calsona
slang@kcsa.com

¹See "Measures other than IFRS".
²Preliminary and unaudited financial results are subject to the usual procedures of the company and its auditors for the preparation of financial statements. Actual results may be affected by subsequent events or findings. Although the company believes that the preliminary financial results are reasonable, these results involve known and unknown risks and uncertainties that could cause actual results to differ materially. These preliminary financial results are forward-looking information. See "Forward-Looking Statements" and "Financial Projections."