Toronto, Ontario--(Newsfile Corp. - August 9, 2023) - Halo Collective Inc. (NEO: HALO) (OTC Pink: HCANF) (FSE: A9K0) ("Halo" or the "Corporation"), a leading player in the cannabis industry, has released its financial results for the fourth quarter of 2022 and first quarter of 2023.

Fourth Quarter 2022 Financial Highlights:

• During the three months ended December 31, 2022, the Company reported revenues of $4,565,601, down from $8,365,976 in the three months ended December 31, 2021. The decrease was primarily attributed to pricing challenges in the cannabis markets of both Oregon and California. These regions have witnessed an oversupply of cannabis flower, leading to downward pricing pressure on the Company's products.
  
  
• Total sales volume for the three months ended December 31, 2022, totaled 1,983,402 grams, marking a significant 84.7% decrease compared to 12,971,391 grams recorded in the same period of 2021.
  
  
• In regional breakdowns, Oregon generated $2,738,014 in revenue for the three months ended December 31, 2022, a 45.6% decrease from the $5,033,523 revenue reported for the same period in 2021. The California wholesale business generated $1,233,924 in revenue during the same period, reflecting a 52.8% decrease from $2,616,292 in the three months ended December 31, 2021.
  
  
• The Company reported a gross profit of $45,236 for the three months ended December 31, 2022, a significant improvement from the gross loss of $1,345,783 reported in the same period of 2021. The reported gross margin for this period was 1.0%, compared to a gross margin of -16.1% for the three months ended December 31, 2021.
  
  
• The loss before interest, tax, depreciation & amortization, and adjusted for non-cash items (adjusted EBITDA) for the three months ended December 31, 2022, amounted to a loss of $12,266,056, compared to a loss of $7,686,775 for the same period in 2021. Operating expenditures were $9,267,000, down from $10,928,194 for the three months ended December 31, 2021.
  
  
• Halo also reported raising $1,477,828 in debt financing during the three months ended December 31, 2022. After accounting for a reduction of $455,199 in lease obligations, the total capital raise amounted to $1,022,629, a decrease from $1,407,278 raised in the same period of 2021. The net cash outflow for the three months ended December 31, 2022, was $767,513, a considerable improvement from a cash outflow of $6,679,557 in the same period of 2021.
  
  
• Revenues for the year ended December 31, 2022, totaled $24,538,853, indicating a 32.0% decrease from the $36,179,930 reported for the year ended December 31, 2021. Despite this decrease, the reported gross margin for the year ended December 31, 2022, was 21.1%, a significant improvement from the gross margin of 12.3% recorded in the same period of the previous year.
  
  
• As of December 31, 2022, Halo reported no unrestricted cash available. The Company remains committed to its strategic direction and continuous efforts to adapt to market dynamics.

First Quarter 2023 Financial Highlights:

• The company announced revenues of $4,620,253 for the quarter, reflecting a 38.9% decrease compared to the same period last year.
  
  
• The decline in revenues was primarily attributed to the challenging market conditions in both the Oregon and California cannabis markets. Oversupply of cannabis flower in these markets has led to a decrease in pricing, impacting overall revenues. In the three months ended March 31, 2023, total sales were 1,647,000 grams, a 31.6% decrease from the same period in 2022.
  
  
• Despite the revenue decrease, Halo reported a gross profit of $1,696,047 for the first quarter of 2023, marking a 36.0% increase compared to the same period last year. The reported gross margin was 36.7% for the quarter, a significant improvement from the previous year's gross margin of 16.5%.
  
  
• The company's adjusted EBITDA for the three months ended March 31, 2023, was an income of $204,351, demonstrating a notable improvement from a loss of $3,904,287 in the same period in 2022. Operating expenditures were reduced by 42.7%, totaling $6,084,429 for the quarter.
  
  
• Halo successfully raised $1,864,861 in debt financing during the first quarter, contributing to a net cash inflow of $750,118. The company's total capital raise, a net reduction of $457,350 in lease obligations, amounted to $1,407,511.
  
  
• Management remains committed to strategic cost reduction measures to address the challenging market dynamics and drive operational efforts. The company's focus on optimizing its product portfolio and enhancing distribution channels positions Halo Collective for future growth and improved financial performance.

"We recognize the challenges posed by evolving market dynamics and supply-demand imbalances in both the Oregon and California cannabis markets," commented Katie Field, Executive Chairman and Chief Executive Officer.

"Despite these challenges, I am pleased to report that our efforts to optimize our operations and product mix have yielded positive results. We've achieved a substantial improvement in gross profit and margins from the previous year, and Halo's commitment to cost reduction initiatives has been instrumental in our performance. While the recent financial results showcase short-term challenges, we're proactively managing our resources and expenses to drive long-term growth."

Ms. Field concluded, "Looking ahead, we remain steadfast in our dedication to delivering value to our customers and shareholders. We will continue to implement strategic measures to navigate the evolving market dynamics and optimize our distribution channels. I am confident that our focus on operational efficiency and product excellence will drive improved financial performance in the quarters to come."

Future Outlook:

Halo Collective's focused efforts on cultivating its North American assets, optimizing operations, and managing costs, position the company for a resilient and prosperous future. As the cannabis industry continues to evolve, Halo remains dedicated to leveraging its strengths and seizing opportunities for sustainable growth.

About Halo Collective

Halo is focused on the United States West Coast, where it has vertically integrated operations covering the entire value chain from seed to sale. Halo cultivates, extracts, manufactures, and distributes quality cannabis flower, pre-rolls, vape carts, edibles, and concentrates. Halo sells these products under a portfolio of brands, including Hush™, Winberry Farms™, its retail brand Budega™, and license agreements with FlowerShop*. In addition, Halo has opened two dispensaries in Los Angeles under the Budega™ brand in North Hollywood and Hollywood, with plans to open one more in Hollywood in 2023.

In the non-THC sector, Halo is expanding into health and wellness categories, including CBD and functional supplements such as nootropic nutraceuticals and non-psychotropic mushrooms. Halo, through a series of acquisitions, has product offerings in the form of beverages (H2C Beverages), dissolvable strips (Dissolve Medical), capsules (Hushrooms™), and topical supplements (Hatshe) with proposed national distribution via a strategic agreement with SWAYEnergy Corporation.

Halo has successfully acquired and integrated a variety of companies which were subsequently reorganized to create Akanda Corp. (NASDAQ: AKAN), an international medical cannabis and wellness company, of which Halo is the largest shareholder. Halo has also acquired a range of software development assets, including CannPOS, Cannalift, CannaFeels, and a discrete sublingual dosing technology, Accudab. Halo intends to reorganize these entities (including their intellectual property and patent applications) into a subsidiary called Halo Tek Inc. and to complete the distribution of the shares of Halo Tek Inc. to shareholders on record at a date to be determined.

For further information regarding Halo, see Halo's disclosure documents on SEDAR at www.sedar.com.

Connect with Halo Collective: Email | Website | LinkedIn | Twitter | Instagram

Contact Information

Halo Collective Inc.
Investor Relations
info@haloco.com
www.haloco.com/investors

For additional information, please contact Katie Field, Chief Executive Officer of the Company at (541) 816-4810 or katie@haloco.com.

Cautionary Note Regarding Forward-Looking Information and Statements

This news release contains certain "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws (the "forward-looking statements"), within the meaning of applicable Canadian securities legislation, including statements related, but not limited to statements relating to the appointment of the Successor Auditors and the term of their appointment, the issuance of the FFCTO, the contents of these orders, the Company's ability to file the Required Filings, the subsequent revocation of the FFCTO, and management's plans regarding its businesses. Forward-looking statements are statements that are not historical facts and are generally, although not always, identified by words such as "expect", "plan", "anticipate", "project", "target", "potential", "schedule", "forecast", "budget", "estimate", "intend" or "believe" and similar expressions or their negative connotations, or that events or conditions "will", "would", "may", "could", "should" or "might" occur. All such forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. These forward-looking statements are made as of the date of this news release. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the future circumstances, outcomes or results anticipated in or implied by such forward-looking statements will occur or that plans, intentions or expectations upon which the forward-looking statements are based will occur.

While we have based these forward-looking statements on our expectations about future events as of the date of this news release, the statements are not a guarantee that such future events will occur and are subject to risks, uncertainties, assumptions and other factors which could cause events or outcomes to differ materially from those expressed or implied by such forward-looking statements. Such factors and assumptions include, among others, the auditor's term, the review, filing and completion of the Required Filings as well as the duration and revocation of the FFCTO. Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated or implied by such forward-looking statements which may include the failure of the Company to comply with applicable regulatory requirements, the Company's inability to complete and file the Required Filings, the failure to satisfy requirements to remove the FFCTO, the resignation or removal of an auditor; unexpected changes in governmental policies and regulations in the jurisdictions in which the Company operates.

Although we have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake any obligation to update or alter any forward-looking statements except as required under applicable securities laws. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.