Avant Brands Reports Record Revenues for Q3 2022

• Year-to-Date ("YTD") Gross Sales increased 67% to $13.8 million
• Q3 2022 Gross Sales were $4.7 million - establishing a new record for the company
• Achieved Positive Adjusted EBITDA⁽²⁾ and Positive Cash Flow from Operations⁽⁵⁾ for Q3 and YTD
• Maintained a strong balance sheet with $8 million in cash and no bank debt

KELOWNA, BC / ACCESSWIRE / October 12, 2022 / Avant Brands Inc. (TSX:AVNT)(OTCQX:AVTBF)(FRA:1BU0) ("Avant" or the "Company"), a leading producer of premium handcrafted cannabis products, is pleased to announce its financial results for the quarter ended August 31, 2022 ("Q3 2022").

"Q3 2022 established a new quarterly sales record for the Company, while generating positive adjusted EBITDA and cash flow from operations," said Norton Singhavon, Founder and CEO of Avant. "Continuing from this positive momentum, we have experienced an exceptional start to Q4, both from a recreational and export sales perspective."

Avant achieved record gross revenues, positive Adjusted EBITDA⁽²⁾, and positive cash flow from operations⁽⁵⁾, for the three and nine months ended August 31, 2022. Total sales revenue for the first three fiscal quarters of fiscal 2022 has already exceeded total sales revenue for all of fiscal 2021 by $2.8 million (+25%). As of August 31, 2022, the Company had $8 million in cash, $27 million in working capital and no bank debt.

Key Financial & Operational Highlights: Q3 YTD 2022 vs. Q3 YTD 2021

• Total production at the Company's four facilities increased by 69% to 3,976 kg.
• Cannabis sales volume increased by 98% to 2,495 kg.
• Gross Revenue increased by 67% to $13.8 million.
• Q1, Q2, and Q3 2022 have been the three highest revenue quarters in the Company's history.
• Recreational cannabis sales accounted for 80% of Gross Revenue with the remainder being export and bulk sales (vs. 81% in the prior year).
• Recreational cannabis gross revenue per gram declined by 2%, from $7.27 to $7.14, as the Company continues to withstand significant price compression.
• International dried flower exports totalled over 600 kg.
• Adjusted EBITDA⁽²⁾ increased by $0.3 million to $0.2 million.

Key Financial & Operational Highlights: Q3 2022 vs. Q2 2022

• Total production at the Company's four facilities increased by 7% to 1,420 kg.
• Total Gross Revenue increased from $4.5 million to $4.7 million (+5%), establishing a new record.
• Recreational cannabis Net Revenue increased from $3.1 million to $3.7 million (+20%), demonstrating the growing demand for the Company's core sales channel.
• Recreational and Medical divisions both achieved record Gross Revenues.
• Net loss from operations was significantly reduced from $4.4 million to $0.5 million, as a result of the Company's dedication to becoming profitable in the near future.
• Adjusted EBITDA⁽²⁾ increased by $1.2 million to $0.7 million.

Other Highlights & Subsequent Events

• During and subsequent to Q3, the Company launched a diverse range of premium products under the BLK MKT™, Tenzo™, Cognōscente™ and Treehugger™ brand names. The primary distributors of these products are the Ontario Cannabis Store, the B.C. Liquor Distribution Branch, and other provincial and territorial distributors.
• The Company entered into an amended Shareholders Agreement related to 3PL Ventures Inc. ("3PL") effective June 1, 2022, increasing its ownership stake in 3PL from 49% to 50%, and achieving recognition as General Manager of the 3PL business. The Company is now in a position to exercise control over 3PL and has commenced consolidating 3PL financial results into its financial reporting (in accordance with IFRS).
• ‘Alberta Craft Cannabis Inc.' was renamed as ‘Avant Craft Cannabis Inc.'. Accordingly, the vast majority of the Company's branded products are now sold within domestic recreational channels with ‘Avant' as the selling licensed producer.
• Changes to Israeli government cannabis import requirements caused some Avant export shipments to be delayed from Q3 2022 to Q4 2022. As a result, Q3 2022 export revenues were less than expected (reflecting sales to Australia only), but exports are expected to increase in Q4 (based on actual shipments plus additional shipments that are scheduled to ship in Q4).
• The quality of the Company's products is driving demand that exceeds the aggregate output of its cultivation facilities. Accordingly, during the course of fiscal 2022, the Company has been executing various co-packing agreements, and exploring M&A opportunities, with a view to prudently expand capacity over time.

Financial Highlights

^{Note 1 - Gross margin before fair value adjustments is a non-IFRS performance measure. Refer to "Non-IFRS Financial Measures And Other Measures" below for further details. Management determined that the exclusion of the fair value adjustment is an alternative representation of performance. The fair value adjustment is a non-cash gain (loss) and is based on fair market value less cost to sell.}

^{Note 2 - Adjusted EBITDA is a non-IFRS performance measure. Refer to "Non-IFRS Financial Measures And Other Measures" below for further details.}

^{Note 3 - Average recreational gross pricing per gram is a non-IFRS performance measure and is calculated by determining the total recreational sales divided by the total number of recreational grams sold. Refer to "Non-IFRS Financial Measures And Other Measures" below for further details.}

^{Note 4 - Weighted average gross pricing per gram is a non-IFRS performance measure and is calculated by determining the total flower sales divided by the total number of flower grams sold. The primary driver of change in this metric is the shift in business mix (e.g. between recreational and export sales). Refer to "Non-IFRS Financial Measures And Other Measures" below for further details.}

^{Note 5 - Cash flows from operations before changes in net-working capital is a non-IFRS performance measure and is calculated by adjusting the net loss from continuing operations for items not affecting cash, but before applying changes in non-cash operating working capital.}

Conference Call

Management will host a conference call to discuss the financial results on October 13, 2022, at 4:00 PM Eastern Time / 1:00 PM Pacific Time.

Dial-in Information

Canada/USA Toll Free: +1-800-319-4610
International Toll: +1-604-638-5340

A transcript of the call will be posted on the Company's website at www.avantbrands.ca within 48 hours of the call.

A copy of the Management Discussion & Analysis ("MD&A") and Financial Statements for Q3 2022 can be downloaded from the Company's SEDAR profile, or on its website at www.avantbrands.ca.

About Avant Brands Inc.

Avant is an innovative, market-leading premium cannabis company. Avant has multiple operational production facilities across Canada, which produce high-quality, handcrafted cannabis products, based on unique and exceptional cultivars. Avant's products are distributed via three complementary sales channels: recreational, medical and export. Avant's recreational consumer brands include: BLK MKT™, Tenzo™, Cognōscente™ and Treehugger™, which are sold in British Columbia, Saskatchewan, Manitoba, Ontario, Prince Edward Island, Newfoundland and Labrador, Northwest Territories, and Nunavut. The Company's medical cannabis brand, GreenTec™, is distributed nationwide, directly to qualified patients through its GreenTec Medical portal and through various medical cannabis partners.

Avant is a publicly traded corporation listed on the Toronto Stock Exchange (TSX:AVNT), and cross-trades on the OTCQX Best Market (OTCQX:AVTBF) and Frankfurt Stock Exchange (FRA:1BU0). The Company is headquartered in Kelowna, British Columbia and has operations in British Columbia, Alberta and Ontario.

To learn more about Avant, access the investor presentation, or learn more about its consumer brands, please visit www.avantbrands.ca.

For additional information, please contact:

Investor Relations at Avant Brands Inc.
1-800-351-6358
ir@avantbrands.ca

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:

This news release includes certain "forward-looking information" as defined under applicable Canadian securities legislation, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to future business activities and operating performance. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions and includes information regarding: the growing demand for the Company's core sales channel; the Company's dedication to becoming profitable in the near future; the Company's ability to increase production levels at the 3PL facility; the Company's ability to expand it's global export client base; the Company's ability to increase the quantity of cannabis products available for sale; and expectations for other economic, business, and/or competitive factors. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. Examples include statements that the Company will operate in a fiscally disciplined manner; preliminary financial results are subject to the completion of the Company's financial closing procedures and have not been audited or reviewed by the Company's independent auditor; that the Company will build long-term shareholder value and reduce operational expenses; or that the Company will increase its revenue and gross margins.

Investors are cautioned that forward-looking information is not based on historical fact but instead reflects management's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: regulatory and licensing risks; changes in consumer demand and preferences; changes in general economic, business and political conditions, including changes in the financial markets and inflation-related risks; the global regulatory landscape and enforcement related to cannabis, including political risks and risks relating to regulatory change; compliance with extensive government regulation; public opinion and perception of the cannabis industry; and the risk factors set out in the Company's annual information form dated February 28, 2022, filed with Canadian securities regulators and available on the Company's profile on SEDAR at www.sedar.com.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. For instance, there can be no assurance that the Company's financial results for Q3 2022, including the Company's revenues or any other preliminary financial results for Q3 2022 will be as projected. Although the Company has attempted to identify important risks, uncertainties and factors that could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information, which speak only as of the date of this news release. The Company 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 required by law.

NON-IFRS FINANCIAL MEASURES AND OTHER MEASURES:

Certain measures, such as adjusted EBITDA, gross margin before fair value adjustments, operating expenses from continuing operations, and average recreational gross pricing per gram, in this press release do not have any standardized meaning as prescribed by International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board and may, therefore, be considered non-IFRS financial measures, non-IFRS measures, or other measures and may not be comparable to similar measures presented by other issuers. Non-IFRS financial measures are used by management to assess the financial and operational performance of the Company. The Company believes that these non-IFRS financial measures, in addition to conventional measures prepared in accordance with IFRS, enable investors to evaluate the Company's operating results, underlying performance and prospects in a similar manner to the Company's management. As there are no standardized methods of calculating these non-IFRS measures, the Company's approach may differ from those used by others, and accordingly, the sue of these measures may not be directly comparable. Accordingly, these non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures include:

• Non-IFRS Measures - gross margin before fair value adjustments; adjusted EBITDA; operating expenses from continuing operations
• Non-IFRS Ratios - gross margin %; average recreational price per gram; weighted average gross price per gram

Refer to the Company's MD&A for additional details.

ADJUSTED EBITDA:

The Company has identified adjusted EBITDA as a relevant industry performance indicator. Adjusted EBITDA is a non-IFRS financial measure used by management that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.

Management defines adjusted EBITDA as income (loss) from continuing operations, as reported, adjusted for depreciation and amortization, equity (gain) loss on investment in associate, financing costs, gains and losses on sale of marketable securities, CEWS, interest and accretion, share-based payments, fair value gain on acquisition, impairment of inventory, change in fair value of biological assets realized through inventory sold, and unrealized gains and losses on changes in fair value of biological assets. Management believes this measure provides useful information as it is a commonly used measure in the capital markets to approximate operating earnings. See table below for determination of specific components of adjusted EBITDA.

SOURCE: Avant Brands, Inc.