Canada's Trees Q1 Revenue Grows 106% YoY, What About Adjusted EBITDA?

Trees Corporation TREE released its first quarter financial results for the three month period ended June 30, 2023, revealing revenue of CA$4.05 million ($3 million), a 106% increase from the comparative period in 2022 and a 47% increase from the three months ended March 31, 2023.

Q1 2023 Financial Highlights

• Gross profit of CA$1.4 million (34% of revenue), a 101% increase from CA$700,000 for the comparative period in 2022 (33% of revenue).

• Net loss from operations of CA$600,000 (CA$0.003 per share) compared to a net loss of CA$700,000 (CA$0.006 per share) in the comparative period in 2022.

• Adjusted EBITDA of CA$110,290 compared to negative CA$49,742 for the comparative period in 2022.

• Cash at the end of the period was CA$179,484.

"During the first quarter ending June 30, 2023, Trees achieved positive operating cashflows, record revenue and gross margin and positive adjusted EBITDA as a result of our disciplined focus on key operating strategies and objectives" stated Jeff Holmgren, president and CFO of Trees. "Trees has demonstrated from the results of this quarter, that it is firmly on a path for long- term profitable growth.  With the added financial and operational scale from the previously announced business combination with FOUR20, we are excited for the future as we emerge as one of the largest cannabis retailers in Canada."

On July 12, 2023, Trees and 420 Investments Ltd. ("FOUR20") entered into a business combination agreement, pursuant to which Trees and FOUR20 will amalgamate, constituting a reverse takeover of Trees by FOUR20 under the policies of Cboe Canada, the new business name of the NEO Exchange. Completion of the FOUR20 transaction remains subject to certain closing conditions, including receiving approval from shareholders, Cboe Canada and the provincial regulators. Subject to the satisfaction or waiver of all closing conditions, the FOUR20 transaction is expected to be completed on or before October 15, 2023.

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