FLUENT — Interim / Quarterly Report 2024

Aug 22, 2024

==> picture [81 x 76] intentionally omitted <==

Cansortium Reports Second Quarter 2024 Results

- Q2 Revenue up 12% YoY to a record $27.3 Million

- 11[th] Consecutive Quarter of Positive Cash Flow from Operations

TAMPA, Fla., Aug. 22, 2024 /CNW/ - Cansortium Inc. (CSE: TIUM.U) (OTCQB: CNTMF) ("Cansortium" or the "Company"), a vertically-integrated, multi-state cannabis company operating under the FLUENT™ brand, today announced financial and operating results for the quarter ended June 30, 2024. Unless otherwise indicated, all financial results are presented in U.S. dollars.

"We delivered another quarter of year-over-year revenue growth and positive cash flow generation during the second quarter as we continued to execute on our growth objectives," said CEO Robert Beasley. "We continue to lay the foundation for growth and scalability while remaining excited about the opportunities ahead."

"In Florida, we have focused on enhancing manufacturing efficiencies and cultivation yields, which has resulted in both an improvement of product quality and cost of goods sold. This has allowed us to retain high profit margins while price competition continues to heat up."

"Looking ahead, we are excited about our upcoming business combination with RIV Capital and have already begun key integration steps. Our shared focus remains on driving growth and profitability by leveraging our core strengths in cultivation, operating expertise and inventory optimization to drive results for shareholders. We remain laser focused on our existing portfolio in Florida, Pennsylvania and Texas and look forward to closing the RIV Capital agreement in the fourth quarter."

Q2 2024 Financial Highlights (vs. Q2 2023)

Revenue increased 12% to $27.3 million compared to $24.4 million.

• Florida revenue increased 15% to $23.1 million compared to $20.1 million.

• Adjusted gross profit[1] was $12.3 million or 48.6% of revenue, compared to $10.2 million or 46.4% of revenue.

• Adjusted EBITDA was $7.7 million compared to $6.8 million, with the increase primarily driven by higher revenues due to additional production and stores.

• Cash flow from operations for the three months ended June 30, 2024 was $2.8 million compared to $4.8 million in the prior year primarily due to settlement of tax payments that had been carried over from previous periods.

• On June 30, 2024, the Company had approximately $8.5 million of cash and cash equivalents and $67.5 million of total debt, with approximately 300 million shares outstanding.

Recent Operational Highlights

• In Florida, Cansortium currently operates 35 stores and anticipates opening 4 new stores by Q2 2025. In Pennsylvania, Cansortium completed renovations and expanded its Hanover store, refreshing its look and doubling its size. The store remained operational for the entirety of renovations.

• The company has begun integration activities with RIV Capital sharing best operational practices and driving efficiencies in advance of the business combination expected to close in Q4 2024.

About Cansortium Inc.

Cansortium is a vertically-integrated cannabis company with licenses and operations in Florida, Pennsylvania and Texas. The Company operates under the Fluent™ brand and is dedicated to being one of the highest quality cannabis companies for the communities it serves. This is driven by Cansortium's unrelenting

commitment to operational excellence in cultivation, production, distribution and retail. The Company is headquartered in Tampa, Florida.

Cansortium Inc.'s Common Shares trade on the CSE under the symbol "TIUM.U" and on the OTCQB Venture Market under the symbol "CNTMF". For more information about the Company, please visit www.getFLUENT.com.

__________1 Adjusted gross profit is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. The Company calculates adjusted gross profit from gross profit plus (minus) the changes in fair value of biological assets, as presented in the consolidated statement of operations.

Forward-Looking Information

Certain information in this news release may constitute forward-looking information within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forwardlooking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent the Company's expectations, estimates, and projections regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company's control.

Forward-looking information is necessarily based on many opinions, assumptions, and estimates that, while considered reasonable by the Company as of the date of this news release, are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in the public documents of the Company available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this news release are made as of the date of this news release, and the Company expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.

For further information: www.getFLUENT.com.

Company Contact

Robert Beasley, CEO (850) 972-8077 investors.getFLUENT.com

Investor Relations Contact

investors@cansortiuminc.com

Cansortium Inc.

Consolidated Statements of Financial Position As of June 30, 2024, and December 31, 2023

(Amounts expressed in thousands of United States Dollars unless otherwise stated)

		June 30,	June 30,	December 31,	December 31,
		2024		2023
Assets
Current assets
Cash		$	8,483	$	10,521
Trade receivable			83		215
Inventory, net	Note 3	13,400			9,244
Biological assets	Note 4		4,279		331
Prepaid expenses and other current assets	Note 5		2,705		1,882

Total current assets		28,950	22,193
Property and equipment, net	Note 6	26,138	27,642
Intangible assets, net	Note 7	94,845	93,593
Right-of-use assets, net	Note 12	32,187	31,943
Goodwill	Note 8	1,525	1,525
Other assets		997	907
Total assets		$ 184,642	$ 177,803
Liabilities
Current liabilities
Trade payable		$ 5,676	$ 5,525
Accrued liabilities		10,445	9,779
Income taxes payable		28,666	22,009
Derivative liabilities	Note 10	1,715	9,109
Current portion of notes payable, net	Note 11	62,063	213
Currentportion of lease liabilities	Note 12	3,081	2,872
Total current liabilities		111,646	49,507
Notes payable, net	Note 11	5,489	61,189
Lease liabilities	Note 12	37,944	37,242
Deferred tax liability		20,365	17,398
Other long-term liabilities	Note 20	3,447	3,882
Total liabilities		178,891	169,218
Shareholders' equity
Share capital	Note 13	183,690	183,690
Share-based compensation reserve		6,931	6,739
Equity conversion feature		6,867	6,677
Warrants	Notes 13	29,634	29,634
Accumulated deficit		(221,037)	(217,821)
Foreign currencytranslation reserve		(334)	(334)
Total shareholders' equity		5,751	8,585
Total liabilities and shareholders' equity		$ 184,642	$ 177,803

Cansortium Inc.

Statement of Operations For the three- and six-months ending June 30, 2024 and 2023

(Amounts expressed in thousands of United States Dollars unless otherwise stated)

	For the three months ended	For the six	months ended
	June 30, 2024 June 30, 2023	June 30, 2024	June 30, 2023
Revenue, net of discounts Cost ofgoods sold	$ 27,269 $ 24,430 13,490 11,448	$ 52,496 26,456	$ 46,486 23,275
Gross profit before fair value adjustments Fair value adjustments on inventory sold Unrealized gain (loss) on changes in fair value of biological assets Note 4	13,779 12,982 (1,788) 2,211 8,268 (3,035)	26,040 (160) 9,315	23,211 4,552 (8,092)
Gross profit Expenses General and administrative Note 14 Sales and marketing Note 14 Depreciation and amortization Notes 6,7 Share-based compensation	20,259 12,158 4,607 2,571 6,018 5,576 1,780 1,929 142 177	35,195 8,570 11,452 3,510 191	19,671 4,883 9,574 3,777 415
Total expenses	12,547 10,253	23,723	18,649
Income from operations Other expense (income) Finance costs, net Note 19 Gain on change in fair value of derivative liability Notes 10 Loss on disposal of assets Loss from termination of a contract	7,712 1,905 4,835 4,324 (5,707) (442) - - 3 82	11,472 9,546 (7,394) 212 3	1,022 8,573 (164) 70 3

Other miscellaneous income (2) -	- 67
Total other(income)expense (871) 3,964	2,367 8,549
Income (loss) before income taxes 8,583 (2,059) Income tax expense Note 9 7,636 3,291	9,105 (7,527) 12,321 5,205
Net comprehensive income(loss) $947 $ (5,350)	$ (3,216) $ (12,732)
Net loss per share Basic and diluted - continuing operations $ 0.00 $ (0.02) Weighted average number of shares Basic number of shares 299,573,039 296,938,910 Diluted number of shares 341,443,706 352,230,174	$ (0.01) $ (0.05) 299,551,203 286,804,241 341,763,315 339,972,379

Cansortium Inc. Consolidated Statements of Cash Flow For the six months ended June 30, 2024 and 2023

(Amounts expressed in thousands of United States Dollars unless otherwise stated)

	For the six months ended	For the six months ended	For the six months ended
	June 30,		June 30,
	2024		2023
Operating activities
Net loss from continuing operations	$	(3,216)	$	(12,732)
Adjustments to reconcile net loss to net cash provided by operating activities:
Unrealized loss (gain) on changes in fair value of biological assets		(9,315)		8,092
Realized loss (gain) on changes in fair value of biological assets		160		(4,552)
Share-based compensation		191		415
Depreciation and amortization		7,473		8,042
Accretion and interest of convertible debentures		284		266
Accretion and interest of term loan		6,802		6,262
Interest of equipment loan		-		13
Interest on insurance financing		30		-
Interest on convertible promissory note		49		-
Loss on disposal of assets		212		70
Change in fair market value of derivative		(7,394)		(164)
Interest on lease liabilities		2,405		2,037
Deferred tax expense		2,898		(1,517)
Changes in operating assets and liabilities:
Trade receivable		132		1
Inventory		8,132		7,402
Biological assets		(7,081)		(8,886)
Prepaid expenses and other current assets		687		11
Right of Use Assets/Liabilities		(2,525)		67
Other assets		(90)		(40)
Trade payable		152		(135)
Accrued liabilities		666		(623)
Other long-term liabilities		(435)		(791)
Income taxespayable		6,657		6,722
Net cashprovided byoperatingactivities		6,874		9,960
Investing activities
Purchases of property and equipment		(3,902)		(4,339)
Purchase of intangible assets		(1,332)		-
Net cash used in investingactivities		(5,234)		(4,339)
Financing activities
Net proceeds from issuance of shares and warrants		-		2,993
Net proceeds from convertible note		3,000		-
Payment of lease obligations		(1,412)		(3,188)
Net proceeds from auto and equipment loan		48		-
Principal repayments of notespayable		(5,314)		(4,988)
Net cash used in financingactivities		(3,678)		(5,183)
Net increase (decrease) in cash		(2,038)		438
Cash,beginningofperiod		10,521		8,359
Cash,end ofperiod	$	8,483	$	8,797

Cansortium Inc. Adjusted EBITDA Calculation

(Amounts expressed in thousands of United States Dollars unless otherwise stated)

	Three months ended
	June 30, June 30, 2024 2023 Variance
Net loss Finance costs, net Income taxes Depreciation and amortization	$ 947 $ (5,350) $ 6,297 4,835 4,324 511 7,636 3,291 4,345 3,771 3,887 (116)
EBITDA	$17,189 $6,152 $11,037

	Three months ended
	June 30, June 30, 2024 2023 Variance
EBITDA $ 17,189 $ 6,152 $ 11,037 Change in fair value of biological assets (6,480) 824 (7,304) Change in fair market value of derivative (5,707) (442) (5,265) Professional Fees 1,852 - 1,852 One-time employee costs 454 - 454 Loss on termination of contract - 82 (82) Share-based compensation 142 177 (35) Other non-recurringexpense/(income) 240 - 240
Adjusted EBITDA $7,690 $6,793 $897

	Six months ended
	June 30, June 30, 2024 2023 Variance
Net loss Finance costs, net Income taxes Depreciation and amortization	$ (3,216) $ (12,732) $ 9,516 9,546 8,573 973 12,321 5,205 7,116 7,473 7,662 (189)
EBITDA	$26,124 $8,708 $17,416
	Six months ended
	June 30, June 30, 2024 2023 Variance
EBITDA $ 26,124 $ 8,708 $ 17,416 Change in fair value of biological assets (9,155) 3,540 (12,695) Change in fair market value of derivative (7,394) (164) (7,230) Professional Fees 3,641 - 3,641 One-time employee costs 614 - 614 Loss on termination of contract - 3 (3) Share-based compensation 191 415 (224) Loss on diposal of assets 212 - 212 Other non-recurringexpense/(income) 241 137 104
Adjusted EBITDA $14,474 $12,639 $1,835

View original content to download multimedia: https://www.prnewswire.com/news-releases/cansortium-reports-second-quarter-2024-results-302229028.html

SOURCE Cansortium Inc.

View original content to download multimedia: http://www.newswire.ca/en/releases/archive/August2024/22/c7505.html

%SEDAR: 00046278E

CO: Cansortium Inc.

CNW 16:05e 22-AUG-24