UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event
reported):
(Exact Name of Registrant as Specified in Its Charter)
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
|
|
||
| (Address of Principal Executive Offices) | (Zip Code) | |
| ( | ||
| (Registrant’s Telephone Number, Including Area Code) | ||
| Not Applicable | ||
| (Former Name or Former Address, if Changed Since Last Report) | ||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange On Which Registered | ||
| Not applicable | Not applicable | Not applicable |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02 Results of Operations and Financial Condition.
On March 27, 2024, Medicine Man Technologies, Inc. (the “Company”) issued a press release announcing results for its fourth quarter and year ended December 31, 2023. A copy of the press release is attached as Exhibit 99.1, and the information contained therein is incorporated herein by reference.
The Company hosted a conference call and webcast to discuss its results for the fourth quarter and year ended December 31, 2023 on March 27, 2024 at 5:00 pm Eastern Time.
This Current Report on Form 8-K and the press release attached hereto as Exhibit 99.1 are being furnished by the Company pursuant to Item 2.02. In accordance with General Instruction B.2 of Form 8-K, the information contained in this Current Report on Form 8-K, including Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. In addition, this information shall not be deemed incorporated by reference into any of the Company’s filings with the Securities and Exchange Commission, except as shall be expressly set forth by specific reference in any such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description |
| 99.1 | Press Release, dated March 27, 2024 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MEDICINE MAN TECHNOLOGIES, INC. | ||
| By: | /s/ Christine Jones | |
| Christine Jones | ||
Date: April 3, 2024 |
Chief Legal Officer | |
Exhibit 99.1
Schwazze Announces Fourth Quarter and Full Year 2023 Financial Results
FY 2023 Revenue of $172.4 Million; Income from Operations of $3.3 Million; Adjusted EBITDA of $53.4 Million or 31% of Revenue
Generated $12.2 Million of Operating Cash Flow in FY 2023
DENVER, CO, March 27, 2024 – Medicine Man Technologies, Inc., operating as Schwazze, (OTCQX: SHWZ) (Cboe: SHWZ) ("Schwazze" or the "Company"), today announced financial and operational results for the fourth quarter and full year ended December 31, 2023.
“This past year, the Schwazze team delivered solid top-line growth in two highly competitive markets with 31% adjusted EBITDA margins and improved operating cash flow,” said Forrest Hoffmaster, Interim CEO of Schwazze. “We continued to sharpen our retail strategy while expanding our store footprint by more than 50% to 63 dispensaries across our two markets. Although the Colorado and New Mexico markets were pressured in 2023, we have built a solid foundation with best-in-class service for our patients and customers. Internally, we are also relentlessly focused on maximizing the operating efficiencies of our manufacturing and cultivation facilities to drive higher yields, improved flower quality, and greater output.”
“With strong demand and over 680 recreational retail stores at year-end, the competitive landscape in Colorado is fierce, underscoring the importance of our investments in and attention to elevating the customer experience. We significantly outpaced the market in Q4 on a sequential and year-over-year basis and expect to bolster our growth through improvements in customer acquisition, retention, and loyalty, as well as in the overall retail experience. Additionally, we are beginning to see wholesale pricing stabilize, which we anticipate will continue based on plant counts and ongoing retail pricing pressure.”
“In New Mexico, the proliferation of new licenses has led to increased competition and aggressive pricing strategies from certain players. Cannabis sales in the state were up 18% across a store base that was over 50% higher year-over-year in Q4, leading to lower average revenue per store. While we are beginning to see a slow-down in net new store openings, we anticipate a challenging market ahead. We remain focused on cost optimization and asset utilization while implementing a balanced pricing and promotional strategy to drive traffic into our stores, where we believe we excel in delivering an elevated retail experience. We are committed to fulfilling our promise of being the retailer of choice in New Mexico.”
“Looking ahead, we are optimistic about the regulatory momentum in the industry at large. In the meantime, we will continue to elevate the customer experience, improve our loyalty program, increase our cost efficiencies, and enhance our retail assets. Our team has a demonstrated track record of executing in competitive markets like Colorado and New Mexico where we remain one of the largest operators. We look forward to driving growth and profitability across each of our markets in 2024.”
Fourth Quarter 2023 Financial Summary
| $ in Thousands USD | Q4 2023 | Q3 2023 | Q4 2022 | |||||||||
| Total Revenue | $ | 43,325 | $ | 46,747 | $ | 40,147 | ||||||
| Gross Profit | $ | 7,034 | $ | 21,438 | $ | 21,719 | ||||||
| Adjusted Gross Profit1 | $ | 20,180 | $ | 21,438 | $ | 21,719 | ||||||
| Operating Expenses | $ | 23,276 | $ | 12,514 | $ | 24,224 | ||||||
| Income (Loss) from Operations | $ | (16,242 | ) | $ | 8,924 | $ | (2,505 | ) | ||||
| Adjusted EBITDA2 | $ | 10,953 | $ | 14,119 | $ | 13,285 | ||||||
| Operating Cash Flow | $ | 3,452 | $ | 6,946 | $ | 6,260 | ||||||
Full Year 2023 Financial Summary
| $ in Thousands USD | FY 2023 | FY 2022 | ||||||
| Total Revenue | $ | 172,448 | $ | 159,379 | ||||
| Gross Profit | $ | 76,024 | $ | 80,289 | ||||
| Adjusted Gross Profit1 | $ | 89,170 | $ | 86,830 | ||||
| Operating Expenses | $ | 72,735 | $ | 67,434 | ||||
| Income from Operations | $ | 3,289 | $ | 12,855 | ||||
| Adjusted EBITDA2 | $ | 53,412 | $ | 52,010 | ||||
| Operating Cash Flow | $ | 12,201 | $ | 6,694 | ||||
1 Adjusted Gross Profit is a non-GAAP measure as defined by the SEC and represents gross profit excluding non-cash inventory adjustments. The Company uses Adjusted Gross Profit as it believes it better explains the results of its core business. See “ADJUSTED GROSS PROFIT RECONCILIATION (NON-GAAP)” section herein for an explanation and reconciliations of non-GAAP measure used throughout this release.
2 Adjusted EBITDA is a non-GAAP measure as defined by the SEC, and represents earnings before interest, taxes, depreciation, and amortization, adjusted for other income, non-cash share-based compensation, one-time transaction related expenses, or other non-operating costs. The Company uses Adjusted EBITDA as it believes it better explains the results of its core business. See “ADJUSTED EBITDA RECONCILIATION (NON-GAAP)” section herein for an explanation and reconciliations of non-GAAP measure used throughout this release.
Full Year 2023 Operational Highlights
| · | Expanded the Company’s retail footprint by more than 50% in New Mexico and Colorado to 63 dispensaries. |
| · | Completed the acquisition of Everest Apothecary, adding 14 dispensaries, one cultivation facility, and one manufacturing plant to the Company’s New Mexico operations. |
| · | Acquired Standing Akimbo, the largest medical cannabis dispensary in Colorado, and opened the Company's first medical dispensary in Colorado Springs under the Standing Akimbo banner. |
| · | Acquired two Colorado retail dispensaries in Fort Collins and Garden City from Smokey’s. |
| · | Unveiled an enhanced, custom ecommerce platform in New Mexico under the R. Greenleaf banner. |
| · | Increased wholesale penetration in Colorado and New Mexico by over 3x year-over-year to more than 27% total door penetration in both states. |
| · | Grew Lowell Farms pre-roll sales by over 250% in Colorado where it is now the #1 pre-roll in the state. In addition, Lowell is in six of the largest Colorado accounts and will be available for wholesale in New Mexico starting April 1st, 2024. |
| · | Grew sales with Wana, Schwazze’s fan-favorite gummies brand, by 48% in New Mexico where it is now in 130 doors with eight of the top ten accounts in the state. |
Fourth Quarter 2023 Financial Results
Total revenue in the fourth quarter of 2023 increased 8% to $43.3 million compared to $40.1 million for the same quarter last year. The increase was primarily due to growth from new stores compared to the prior year period and increased wholesale revenue, partially offset by pricing pressure from the proliferation of new licenses in New Mexico.
Gross profit for the fourth quarter of 2023 was $7.0 million or 16.2% of total revenue, compared to $21.7 million or 54.1% of total revenue for the same quarter last year. The decrease in gross margin was primarily driven by one-time, non-cash inventory adjustments of approximately $13.1 million comprised of $3.1 million of product consolidation, obsolescence, and shrinkage expenses, $4.3 million of net realizable value adjustments, and $5.8 million of fair value adjustments on acquired inventory in New Mexico in 2023. Adjusted gross profit, which excludes non-cash inventory adjustments, for the fourth quarter of 2023 was $20.2 million or 46.6% of revenue.
Operating expenses for the fourth quarter of 2023 were $23.3 million compared to $24.2 million for the same quarter last year. The decrease was primarily due to a lower impairment charge in the fourth quarter of 2023. This was partially offset by an increase in four-wall SG&A expenses associated with the 22 additional stores in Colorado and New Mexico that are still ramping, as well as greater salaries and stock-based compensation.
Loss from operations for the fourth quarter of 2023 was $16.2 million compared to $2.5 million in the same quarter last year. The decrease was driven by the aforementioned lower gross profit, primarily related to the non-cash inventory adjustment. Net loss was $33.9 million for the fourth quarter of 2023 compared to $27.3 million for the same quarter last year.
Adjusted EBITDA for the fourth quarter of 2023 was $11.0 million or 25.3% of revenue, compared to $13.3 million or 33.1% of revenue for the same quarter last year. The decrease in Adjusted EBITDA margin was primarily driven by higher operating expenses associated with the 22 additional stores that are still ramping.
As of December 31, 2023, cash and cash equivalents were $19.2 million compared to $38.9 million on December 31, 2022. Total debt as of December 31, 2023, was $156.8 million compared to $127.8 million on December 31, 2022.
Conference Call
The Company will conduct a conference call today, March 27, 2024, at 5:00 p.m. Eastern time to discuss its results for the fourth quarter and full year ended December 31, 2023.
Schwazze management will host the conference call, followed by a question-and-answer period. Interested parties may submit questions to the Company prior to the call by emailing ir@schwazze.com.
Date: Wednesday, March 27, 2024
Time: 5:00 p.m. Eastern time
Toll-free dial-in: (888) 664-6383
International dial-in: (416) 764-8650
Conference ID: 38840334
Webcast: SHWZ Q4 & FY 2023 Earnings Call
The conference call will also be broadcast live and available for replay on the investor relations section of the Company’s website at https://ir.schwazze.com.
Toll-free replay number: (888) 390-0541
International replay number: (416) 764-8677
Replay ID: 840334
If you have any difficulty registering or connecting with the conference call, please contact Elevate IR at (720) 330-2829.
About Schwazze
Schwazze (OTCQX: SHWZ) (Cboe: SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to explore taking its operating system to other states where it can develop a differentiated regional leadership position. Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale.
Schwazze is anchored by a high-performance culture that combines customer-centric thinking and data science to test, measure, and drive decisions and outcomes. The Company's leadership team has deep expertise in retailing, wholesaling, and building consumer brands at Fortune 500 companies as well as in the cannabis sector.
Medicine Man Technologies, Inc. was Schwazze's former operating trade name. The corporate entity continues to be named Medicine Man Technologies, Inc. Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth. To learn more about Schwazze, visit https://schwazze.com/.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include financial outlooks; any projections of net sales, earnings, or other financial items; any statements of the strategies, plans and objectives of our management team for future operations; expectations in connection with the Company's previously announced business plans; any statements regarding future economic conditions or performance; and statements regarding the intent, belief or current expectations of our management team. Such statements may be preceded by the words "may," "will," "could," "would," "should," "expect," "intends," "plans," "strategy," "prospects," "anticipate," "believe," "approximately," "estimate," "predict," "project," "potential," "continue," "ongoing," or the negative of these terms or other words of similar meaning in connection with a discussion of future events or future operating or financial performance, although the absence of these words does not necessarily mean that a statement is not forward-looking. We have based our forward-looking statements on management's current expectations and assumptions about future events and trends affecting our business and industry. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Therefore, forward-looking statements are not guarantees of future events or performance, are based on certain assumptions, and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company's control and cannot be predicted or quantified. Consequently, actual events and results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) regulatory limitations on our products and services and the uncertainty in the application of federal, state, and local laws to our business, and any changes in such laws; (ii) our ability to manufacture our products and product candidates on a commercial scale on our own or in collaboration with third parties; (iii) our ability to identify, consummate, and integrate anticipated acquisitions; (iv) general industry and economic conditions; (v) our ability to access adequate capital upon terms and conditions that are acceptable to us; (vi) our ability to pay interest and principal on outstanding debt when due; (vii) volatility in credit and market conditions; (viii) the loss of one or more key executives or other key employees; and (ix) other risks and uncertainties related to the cannabis market and our business strategy. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC's website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise except as required by law.
Investor Relations Contact
Sean Mansouri, CFA or Aaron D’Souza
Elevate IR
(720) 330-2829
ir@schwazze.com
MEDICINE MAN TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND (LOSS)
For the Periods Ended December 31, 2023 and 2022
Expressed in U.S. Dollars
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (Unaudited) | (Unaudited) | (Audited) | (Audited) | |||||||||||||
| Operating Revenues | ||||||||||||||||
| Retail | $ | 39,592,779 | $ | 36,868,429 | $ | 155,463,816 | $ | 141,254,893 | ||||||||
| Wholesale | 3,730,749 | 3,158,670 | 16,765,425 | 17,819,938 | ||||||||||||
| Other | 1,287 | 120,188 | 218,545 | 304,388 | ||||||||||||
| Total Revenue | 43,324,815 | 40,147,287 | 172,447,786 | 159,379,219 | ||||||||||||
| Total Cost of Goods & Services | 36,291,059 | 18,428,528 | 96,424,150 | 79,090,461 | ||||||||||||
| Gross Profit | 7,033,756 | 21,718,759 | 76,023,636 | 80,288,758 | ||||||||||||
| Operating Expenses | ||||||||||||||||
| Selling, General and Administrative Expenses | 10,848,029 | 8,922,627 | 39,916,518 | 29,036,962 | ||||||||||||
| Professional Services | 1,115,457 | 1,112,975 | 3,558,501 | 6,722,554 | ||||||||||||
| Loss on Impairment | 1,810,890 | 8,011,405 | 1,801,740 | 8,011,405 | ||||||||||||
| Salaries | 6,561,800 | 5,292,996 | 23,883,354 | 20,990,290 | ||||||||||||
| Stock Based Compensation | 2,952,669 | 883,890 | 3,574,831 | 2,672,713 | ||||||||||||
| Total Operating Expenses | 23,288,845 | 24,223,893 | 72,734,944 | 67,433,924 | ||||||||||||
| Income from Operations | (16,255,089 | ) | (2,505,134 | ) | 3,288,692 | 12,854,834 | ||||||||||
| Other Income (Expense) | ||||||||||||||||
| Interest Expense, net | (8,112,391 | ) | (6,827,557 | ) | (32,069,082 | ) | (30,139,645 | ) | ||||||||
| Unrealized Gain (Loss) on Derivative Liabilities | 1,384,228 | (9,690,200 | ) | 15,870,233 | 18,414,760 | |||||||||||
| Other Loss | 68,400 | 3,736 | 68,400 | 24,136 | ||||||||||||
| Loss on Business Disposition | (1,968,807 | ) | (4,684,366 | ) | (1,968,807 | ) | (4,684,366 | ) | ||||||||
| Unrealized Gain (Loss) on Investments | - | 3,083 | 1,816 | (39,270 | ) | |||||||||||
| Total Other Income (Expense) | (8,628,570 | ) | (21,195,304 | ) | (18,097,441 | ) | (16,424,385 | ) | ||||||||
| Pre-Tax Net Income (Loss) | (24,883,659 | ) | (23,700,438 | ) | (14,808,749 | ) | (3,569,551 | ) | ||||||||
| Provision for Income Taxes | 4,494,049 | 3,638,695 | 19,740,595 | 14,898,064 | ||||||||||||
| Net Income (Loss) | $ | (29,377,708 | ) | $ | (27,339,133 | ) | $ | (34,549,344 | ) | $ | (18,467,615 | ) | ||||
| Less: Accumulated Preferred Stock Dividends for the Period | (1,541,341 | ) | (2,508,677 | ) | (8,154,993 | ) | (7,802,809 | ) | ||||||||
| Net Income (Loss) Attributable to Common Stockholders | $ | (30,919,049 | ) | $ | (29,847,810 | ) | $ | (42,704,337 | ) | $ | (26,270,424 | ) | ||||
| Earnings (Loss) per Share Attributable to Common Stockholders | ||||||||||||||||
| Basic Earnings (Loss) per Share | $ | (0.43 | ) | $ | (0.57 | ) | $ | (0.66 | ) | $ | (0.49 | ) | ||||
| Diluted Earnings (Loss) per Share | $ | (0.43 | ) | $ | (0.57 | ) | $ | (0.66 | ) | $ | (0.49 | ) | ||||
| Weighted Average Number of Shares Outstanding - Basic | 71,680,200 | 53,637,003 | 64,535,245 | 53,637,003 | ||||||||||||
| Weighted Average Number of Shares Outstanding - Diluted | 71,680,200 | 53,637,003 | 64,535,245 | 53,637,003 | ||||||||||||
| Comprehensive Income (Loss) | $ | (29,377,708 | ) | $ | (27,339,133 | ) | $ | (34,549,344 | ) | $ | (18,467,615 | ) | ||||
MEDICINE MAN TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Periods Ended December 31, 2023 and 2022
Expressed in U.S. Dollars
| For the Twelve Months Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| (Audited) | (Audited) | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net Income (Loss) for the Period | $ | (34,549,344 | ) | $ | (18,467,615 | ) | ||
| Adjustments to Reconcile Net Income (Loss) to Cash for Operating Activities | ||||||||
| Depreciation & Amortization | 20,933,541 | 10,660,172 | ||||||
| Non-Cash Interest Expense | 4,024,604 | 4,118,391 | ||||||
| Impairment of Goodwill | 1,801,740 | 8,011,405 | ||||||
| Non-Cash Lease Expense | 7,648,531 | 3,910,679 | ||||||
| Deferred Taxes | (2,090,967 | ) | 502,070 | |||||
| Loss on Disposition of Business Units | 1,968,807 | 4,684,369 | ||||||
| Change in Derivative Liabilities | (15,870,233 | ) | (18,414,760 | ) | ||||
| Amortization of Debt Issuance Costs | 1,686,049 | 1,686,048 | ||||||
| Amortization of Debt Discount | 8,523,493 | 7,484,613 | ||||||
| (Gain) Loss on Investments, net | (1,816 | ) | 39,270 | |||||
| Stock Based Compensation | 3,590,473 | 812,073 | ||||||
| Changes in Operating Assets & Liabilities (net of Acquired Amounts): | ||||||||
| Accounts Receivable | 927,259 | (105,185 | ) | |||||
| Inventory | 4,571,069 | 789,399 | ||||||
| Prepaid Expenses & Other Current Assets | 1,579,349 | (2,770,179 | ) | |||||
| Other Assets | 263,419 | (248,682 | ) | |||||
| Change in Operating Lease Liabilities | (7,498,128 | ) | (13,113,041 | ) | ||||
| Accounts Payable & Other Liabilities | (3,241,850 | ) | 11,845,245 | |||||
| Income Taxes Payable | 17,934,967 | 5,270,074 | ||||||
| Net Cash Provided by (Used in) Operating Activities | 12,200,963 | 6,694,346 | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Collection of Notes Receivable | 11,944 | - | ||||||
| Cash Consideration for Acquisition of Business, net of Cash Acquired | (15,834,378 | ) | (58,981,226 | ) | ||||
| Purchase of Fixed Assets | (7,865,654 | ) | (14,007,892 | ) | ||||
| Purchase of Intangible Assets | (2,750,000 | ) | - | |||||
| Investment in Private Entity | - | (2,000,000 | ) | |||||
| Net Cash Provided by (Used in) Investing Activities | (26,438,088 | ) | (74,989,118 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Payment on Notes Payable | (5,354,218 | ) | (134,498 | ) | ||||
| Proceeds from Issuance of Common Stock | - | 978,308 | ||||||
| Payment for Statutory Withholdings on RSU | (108,978 | ) | - | |||||
| Net Cash Provided by (Used in) Financing Activities | (5,463,196 | ) | 843,810 | |||||
| Net (Decrease) in Cash & Cash Equivalents | (19,700,321 | ) | (67,450,962 | ) | ||||
| Cash & Cash Equivalents at Beginning of Period | 38,949,253 | 106,400,216 | ||||||
| Cash & Cash Equivalents at End of Period | $ | 19,248,932 | $ | 38,949,253 | ||||
| Supplemental Disclosure of Cash Flow Information: | ||||||||
| Cash Paid for Interest | $ | 17,896,954 | $ | 15,243,990 | ||||
| Cash Paid for Income Taxes | 5,000,000 | 12,340,000 | ||||||
MEDICINE MAN TECHNOLOGIES, INC.
ADJUSTED EBITDA RECONCILIATION (NON-GAAP)
For the Periods Ended December 31, 2023 and 2022
Expressed in U.S. Dollars
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net Income (Loss) | $ | (29,364,680 | ) | $ | (27,339,133 | ) | $ | (34,549,344 | ) | $ | (18,467,615 | ) | ||||
| Interest Expense, net | 8,112,391 | 6,827,557 | 32,069,082 | 30,139,645 | ||||||||||||
| Provision for Income Taxes | 4,494,049 | 3,638,695 | 19,740,595 | 14,898,064 | ||||||||||||
| Other (Income) Expense, net of Interest Expense | 516,180 | 14,367,747 | (13,971,641 | ) | (13,715,260 | ) | ||||||||||
| Depreciation & Amortization | 3,162,425 | 3,701,128 | 18,970,960 | 12,524,677 | ||||||||||||
| Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) (non-GAAP) | $ | (13,079,635 | ) | $ | 1,195,994 | $ | 22,259,652 | $ | 25,379,511 | |||||||
| Non-Cash Stock Compensation | 1,597,157 | 883,890 | 2,219,319 | 2,672,713 | ||||||||||||
| Deal Related Expenses | 2,196,733 | 1,914,820 | 5,528,048 | 6,822,111 | ||||||||||||
| Capital Raise Related Expenses | 1,779 | (257,271 | ) | 38,559 | 533,958 | |||||||||||
| Inventory Adjustment to Fair Market Value for Purchase Accounting | 5,792,488 | - | 5,792,488 | 6,541,651 | ||||||||||||
| One-Time Inventory Impairment | 7,353,972 | - | 7,353,972 | - | ||||||||||||
| One-Time Goodwill Impairment | 1,801,740 | 8,011,405 | 1,801,740 | 8,011,405 | ||||||||||||
| Severance | 111,752 | 263,374 | 537,584 | 334,910 | ||||||||||||
| Retention Program Expenses | - | - | 505,655 | - | ||||||||||||
| Employee Relocation Expenses | 5,065 | (3,750 | ) | 70,107 | 15,360 | |||||||||||
| Pre-Operating & Dark Carry Expenses | 2,663,824 | 1,027,738 | 2,663,824 | 1,027,738 | ||||||||||||
| One-Time Legal Settlements | 1,204,058 | 440,000 | 1,204,058 | 440,000 | ||||||||||||
| Other Non-Recurring Items | 1,304,501 | (191,674 | ) | 3,436,773 | 230,858 | |||||||||||
| Adjusted EBITDA (non-GAAP) | $ | 10,953,434 | $ | 13,284,526 | $ | 53,411,779 | $ | 52,010,215 | ||||||||
| Revenue | 43,324,815 | 40,147,287 | 172,447,786 | 159,379,219 | ||||||||||||
| Adjusted EBITDA Percent | 25.3 | % | 33.1 | % | 31.0 | % | 32.6 | % | ||||||||