Avant Brands Inc.

Thank you for standing by. This is the conference operator. Welcome to the Avant Brands, Inc. Fourth Quarter 2022 Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Elisa Berry, Investor Relations. Please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome and thank you for joining Avant Brand's Fiscal 2022 Results Conference Call. My name is Elisa Berry, Investor Relations for Avant Brands. Speaking on our call today is Avant's founder and CEO Norton Singhaven and Chief Financial Officer Matt Witt. Avant's Chief Operating Officer David Lin is also present and will be participating in our Q&A session. Our Q4 and fiscal 2022 results were disseminated yesterday and are available on CDAR and on our website at www.avantbrands.ca. Before we get started, I wish to remind everyone that some statements made on today's call are forward-looking in nature and therefore subject to certain risks and uncertainties, which are all outlined in detail in our regulatory filings available on CDAR. On this call, we will refer to the company as Avant Brands or Avant. We recognize that most of you have already reviewed our results issued yesterday, so being mindful of your time, Matt and Norton will keep their comments brief, and we will then transition to our Q&A session. With that, I will turn the discussion over to our CFO, Matt Witt, to share the company's financial results. Norton will provide a strategy update. Please go ahead, Matt.

Thank you, Alyssa, and good afternoon, everyone. Fiscal 2022 was all around a record year for Avant. We continued our trend of strong top-line growth, once again setting new quarterly sales records and achieving record-adjusted EBITDA for Q4 and for the full fiscal year. We are proud to report that we have achieved the largest fiscal year-over-year revenue growth amongst publicly traded LPs in Canada. Our press release issued yesterday summarizes key financial and operational highlights for the 12 months ended November 30th, 2022, compared to the same period last year, as well as a comparison of Q4 to Q3 of 2022 and Q4 of 2021. First, I'll touch on some of these points for the 12 months ended November 30th, 2022. We reported gross revenues of $22.6 million, representing a 105% increase over 2021. Net revenue after excise tax was $20.2 million, up 112% over 2021. Of this net revenue, recreational cannabis sales represented $14.4 million and export revenue was $5 million. Again, both records for both categories. Our overall gross margin of 32% was down slightly over 2021 due to a higher volume of export sales in 2022, which generally do have a lower margin. However, we did sell a total of 3,951 kilograms of cannabis in 2022, up almost 100% over the prior year. Our average selling price for recreational cannabis was $7.13 per gram in fiscal 22, down only 8 cents from fiscal 21, as we continue to withstand strong pricing pressures in the market. We also beat records with our cash flow from operations of 2.2 million and adjusted EBITDA of 1.9 million. Three of the four quarters in fiscal 22 were positive adjusted EBITDA and positive cash flow from operations. Our net loss from operations was 8.5 million this year compared to 5.4 million last year, and this increased loss is primarily due to non-cash items such as the fair value changes on biological assets, share-based compensation, and amortization. The fourth quarter built upon some positive momentum that we had generated in the first three quarters of this year. And some quick highlights for Q4 include selling a total of 1,456 kilos of cannabis in Q4. That's an increase of 124% over Q3, which does provide some context for the following. Q4 had record gross revenues of 8.9 million plus 88% over Q3. had record net revenue of $7.9 million, up 100% over Q3. Record recreational gross revenues of $5.1 million, or plus 37% over Q3. Record export revenue of $2.7 million, up 22% from Q3. Overall, our gross margin was 39%, up slightly over Q3. And we had record cash flow from operations of $1.9 million, or 127% increase over Q3. Record adjusted EBITDA of $1.6 million, again up 124% over Q3. In the fourth quarter, we also reported adjusted net loss of $0.3 million for the quarter and improvement of 41% over Q3. Adjusted net loss is something new that we've started reporting. Management has decided that adjusted net income or loss is a relevant industry measure as it's commonly used in the capital markets to approximate operating earnings. Primarily, this does remove the impact of fair value changes on biological assets when compared to net income. And again, fair value changes is a non-cash item. All told, this was an extremely strong year for Avant, which has set us up to make some significant investments for the future in FY23. Now I will pass this on to our founder and CEO, Norton Singhaven.