ShinyBud Reports 95% Higher Sales and Increase in Adjusted EBITDA for Fiscal Year 2022; Corporate Store Count More Than Quadruples

Successful corporate launch and ramp up to expanded retail platform

(All amounts are in Canadian dollars unless otherwise stated)

TORONTO, May 30, 2022 /CNW/ - ShinyBud Corp. ("ShinyBud" or the "Company") (TSXV: SNYB) today reported its financial and operating results for the twelve months ended January 31, 2022.

"2022 was a momentous year for ShinyBud. We successfully completed a complex business combination and effectively integrated all entities to form ShinyBud Corp.," said Kevin Reed, Chairman and Chief Executive Officer. "Concurrent with our transition to a public entity, last year we delivered meaningful growth and strengthened our brand as we continued to roll out our corporate store network, expanding primarily into underserviced markets."

Mr. Reed added, "In response to consumer data and industry trends, we also recently announced the expansion of our retail strategy to focus on health and wellness by introducing a new retail line of business through community pharmacies. As we continue focusing on driving profitably through our retail cannabis business, we are evaluating community pharmacy opportunities and setting our sights on an exciting year ahead."

Fiscal Year 2022 Highlights
Twelve months ended January 31, 2022 compared to the twelve months ended January 31, 2021.

• Sales increased by 95% to $20.6 million compared to $10.6 million from corporate owned stores. This includes only partial year results for several acquired stores, driven by the timing of business combinations in the period.
  
  
• Pro forma sales of $26.5 million from all corporate stores owned at January 31, 2022, based on actual full-year performance and assuming completion of all acquisitions at the start of the financial year on February 1, 2021 instead of January 2022⁽²⁾
  
  
• Expanded store portfolio from 6 to 28 corporate stores through acquisition and organic growth
  
  
• Gross profit increased by 91% to $7.6 million compared to $4.0 million primarily driven by an expanded store network and a strong gross margin
  
  
• Gross margin of 34% compared to 38%
  
  
• Comprehensive net loss of $5.7 million compared to net income of $1.1 million due to increasing scale of operations offset by corporate start-up costs
  
  
• EBITDA⁽¹⁾ loss of $3.5 million compared to $2.1 million
  
  
• Adjusted EBITDA⁽¹⁾ increased by 21% to $2.5 million from $2.1 million
  
  
• Cash balance of $4.5 million as of January 31, 2022

Financial Highlights

Summary of financial information for the twelve months ended January 31, 2022 compared to twelve months ended January 31, 2021.

	Fiscal Year Ended January 31,
($)	2022	2021	Change
Revenue	20,646,603	10,582,392	95%
Gross profit	7,647,468	4,001,282	91%
Gross profit margin	34%	38%	(11%)
General and administrative	9,153,398	2,206,776	315%
Income (loss) from operations	(1,676,570)	1,699,496	(199%)
Net comprehensive income (loss)	(5,698,805)	1,051,460	(642%)
Basic income (loss) per share	(0.79)	0.15	(627%)
EBITDA^(1)	(3,498,952)	2,068,489	(269%)
Adjusted EBITDA^(1)	2,511,459	2,068,489	21%

"ShinyBud's fiscal performance highlights a very successful ramp up to our productive retail platform through a combination of store acquisitions and new builds," stated Jude Pinto, Chief Financial Officer and Chief Information Officer. "This, coupled with the infrastructure build of taking the Company public, completing several business combinations, and establishing scalable corporate functions positions the Company to continue delivering retail service excellence and innovation to our existing market and into the wider wellness segment over time."

Consolidated Performance
Twelve months ended January 31, 2022 compared to the twelve months ended January 31, 2021.

• During the year, ShinyBud opened 11 new stores and acquired another 12 stores as part of the acquisition of 11181297 Canada Inc. and business combination with Mihi Inc. completed in January 2022, increasing its corporate store count from 6 to 28 stores at fiscal year-end. Subsequent to year-end, the Company opened two stores with an additional location scheduled to open in June 2022.
• Sales increased by 95% to $20.6 million driven by the expanded store portfolio, which includes only partial year results for several acquisitions, driven by the timing of business combinations in the period. The ShinyBuddy Data Program contributed $0.85 million in sales from its partnerships with licensed cannabis producers and brands.
• Gross profit increased by 91% to $7.6 million primarily driven by an expanded store network, and the acquisition of 11181297 Canada Inc. and the business combination with Mihi Inc. completed in January 2022.
• Total general and administrative expenses increased to $9.2 million, a 315% increase primarily due to the level of activity in expanding the retail store network, and costs related to completing the reverse takeover and other acquisitions.
• Net comprehensive loss of $5.7 million is compromised of income of $1.4 million from store level operations and a loss of $7.1 million from corporate activities, including startup costs related to the series of transactions, listing on the TSX Venture Exchange, public legal and professional fees, and establishing a corporate structure.
• EBITDA⁽¹⁾ decreased to negative $3.5 million compared to $2.1 million 
• Adjusted EBITDA⁽¹⁾ increased by 21% to $2.5 million from $2.1 million in the previous year. After the reversal of taxes, interest, and depreciation and amortization, the significant one-time drivers of Adjusted EBITDA are $1.9 million of transaction and acquisition costs, $1.3 million of listing expenses, and $2.8 million of share-based compensation at the time of the corporate start-up.

Consolidated Financial Statements

For further information, refer to ShinyBud's consolidated financial statements and management's discussion & analysis for the fiscal years ended January 31, 2022 and 2021, which are available on the Company's website at investors.shinybud.com and on SEADR under the Company's issuer profile at www.sedar.com.

Rescheduled Conference Call & Webcast

Management has rescheduled its live conference call and audio webcast today to review highlights for the twelve months ended January 31, 2022 as follows:

New Date & Time:	Tuesday, May 31, 2022 at 8:30 a.m. ET
Telephone:	Toll-free + 1-833-950 -0062
	Local or International [phone]
	Please allow a few minutes to be connected to the conference call.
Access Code:	575783
Webcast:	Accessible on ShinyBud's website at investors.shinybud.com/Q42022
Note:	The slide presentation will be available for download at investors.shinybud.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Endnotes      

(1)	The Company defines EBITDA and Adjusted EBITDA as per the table below. EBITDA and Adjusted EBITDA are non-IFRS financial measures that do not have standardized meanings prescribed under IFRS and may not be comparable to similar measures disclosed by other issuers.  Management calculates "EBITDA" for a financial period as the Company's income (loss) for the period, as determined in accordance with IFRS, before accretion and interest, tax, and depreciation and amortization, and calculates "Adjusted EBITDA" for a financial period as the EBITDA for the period after adjusting to remove transaction and acquisition costs, impairment, loss on settlement of loan, listing expense, gain on  revaluation of derivative liability, gain on change in fair value, and share-based compensation.
	Management uses EBITDA and Adjusted EBITDA to assess the Company's ability to generate cash from operations, and the Company believes them to be useful measures for this purpose.  They are, however, supplementary information only and should not be relied upon for comparative or investment purposes. Readers must not consider non-IFRS measures in isolation or as a substitute for analysis of the Company's financial results as reported under IFRS.  EBITDA and Adjusted EBITDA are not, and must not be construed as alternatives to, net income (loss) or cash flow from operating activities as determined under IFRS. After the reversal of taxes, interest, depreciation and amortization, the significant one time drivers of Adjusted EBITDA are $1.9 million of transaction and acquisition costs, $1.3 million of listing expenses, and $2.8 million of share-based compensation at the time of the corporate start-up.
	The following table reconciles net income (loss) for the periods indicated to EBITDA and Adjusted EBITDA, respectively:

	Year-ended January 31, 2022^(a)	Year-ended January 31, 2021^(b)
Net comprehensive income (loss)	(5,698,805)	1,051,460
Income tax (recovery) expense	26,000	413,893
Accretion and interest	900,422	240,532
Depreciation and amortization	1,273,431	362,604
EBITDA	(3,498,952)	2,068,489
Transaction and acquisition costs	1,888,248	-
Impairment	135,505	-
Loss on settlement of loan	174,736	-
Listing expense	1,297,642	-
Gain on revaluation of derivative liability	(325,542)	-
Gain on change in fair value	(87,640)	-
Share-based compensation	2,837,462
Adjusted EBITDA	$2,511,459	$2,068,489

				Notes to table above:
				(a)	Cash outflow for the lease liabilities during the year-ended January 31, 2022 were $744,956.
				(b)	Cash outflow for the lease liabilities during the year-ended January 31, 2021 were $340,847.

(2)	The Company completed a combination transaction with Shiny Bud Inc. ("SBInc") and Mihi Inc. ("mīhī") on January 20, 2022 that constituted a reverse acquisition of the Company by SBInc under IFRS and acquisition of mīhī.  SBInc and mīhī were independent cannabis retailers operating in Ontario, and on January 19, 2022 acquired additional stores through the complementary acquisitions (i) by SBInc of 11181297 Canada Inc. ("11181297"), which owned and operated eight ShinyBud-branded stores, and (ii) by mīhī of 11535447 Canada Corp. ("11535447"), which owned and operated one mīhī-branded store.
	From the date of their respective acquisitions, 11181297 contributed $0.20 million in sales and a loss before taxes of $0.06 million, and mīhī and 11535447 together contributed $0.21 million in sales and a loss before taxes of $0.10 million, to the Company's consolidated financial results for the financial year ended January 31, 2022. On a pro forma basis, assuming for this purpose that the combination and related acquisitions had taken place at the beginning of the Company's financial year such that a full year of results of 11181297, mīhī and 11535447 were included in its consolidated financial results, the Company's consolidated sales for the year would have been $26.5 million.

About ShinyBud 

ShinyBud Corp. is a multi-banner cannabis retailer with 30 corporate  stores and 12 licensed stores across Ontario, Canada's largest cannabis market, striving to provide a more diverse and accessible cannabis experience for adult consumers. On a mission to help people never settle, live fully, the Company recently broadened its retail growth strategy with health and wellness, and the planned acquisition of its first retail pharmacy. ShinyBud's board and management team have extensive retail operating experience, a key competitive differentiator in leading its expanded growth strategy and cannabis franchising program. ShinyBud trades on the TSX Venture Exchange (TSXV) under the ticker symbol SNYB. For more information, please visit investors.shinybud.com.

Cautionary Statement Regarding Forward-Looking Information 

This news release contains statements ("forward looking statements") that constitute forward-looking information within the meaning of applicable Canadian securities laws.  Forward looking statements relate to future performance, events, outcomes or circumstances or are otherwise prospective in nature, are based upon internal assumptions, opinions, estimates, plans, beliefs and expectations about future conditions, developments and courses of action.  They are inherently uncertain as they depend on the accuracy of such assumptions, opinions, estimates, plans, beliefs and expectations, which cannot be assured, and are subject to known and unknown risks and uncertainties that will cause actual results to differ from those indicated, suggested or anticipated in the forward looking statements.  The differences may be material and adverse to the Company.

All statements other than statements of current or historical fact constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "intend", "seek", "plan", "aim", "budget", "forecast", "target", "estimate", "objective", "propose", "predict", "potential", "project", "continue", "pursue", "may", "will", "might", "should", "could" or similar words suggesting future outcomes or events or statements regarding an outlook.

Without limiting the foregoing, this news release contains forward-looking statements pertaining to: ShinyBud's growth strategy and potential in respect of both its retail cannabis business and expansion into the pharmacy sector.

Forward-looking statements, and the underlying assumptions, opinions, estimates, plans, beliefs and expectations on which they are based, are inherently uncertain as they depend on future conditions, developments and courses of action that may or not occur or come to be.  There can be no assurance that the underlying assumptions, opinions, estimates, plans, beliefs and expectations will prove to be correct and, accordingly, no assurance that the future performance, events, outcomes or circumstances expressed or implied in the forward-looking statements herein will occur or be realized.  Actual results will differ, and the differences may be material and adverse to the Company.

In addition to the other factors and assumptions that may be identified herein, material factors and assumptions used to develop the forward-looking statements contained in this news release include, among other things, assumptions, opinions, estimates, plans, beliefs and expectations regarding: the effectiveness of our retail cannabis and pharmacy strategy; our ability to identify and consummate accretive acquisitions, expand our store network within budgeted costs and timelines, drive same-store sales growth, improve margins and generate new revenue streams; our ability to obtain additional licenses, authorizations and regulatory approvals (including any required approvals of the TSX Venture Exchange) as and when required to fit our growth and business plan; the size of the cannabis retail market and estimated portion currently unserved, and the migration of customers from the illicit market to legal market; our ability to capture additional market share; our ability to attract franchisees to the ShinyBud brand and model, and the terms of franchise arrangements; the number, type and locations of new stores; the applicability and relevance of our experience in existing centers and locations to new centers and locations; our ability to influence our customer purchase decisions; our ability to maintain, enhance, and grow our appeal within our addressable market, and to customize products and inventory for the market that resonate with our target customer base; our ability to source product that is key to our menu offerings; our ability to leverage our landlord network and build a flexible lease portfolio; our ability to manage costs and drive operating efficiencies; our ability to retain key management and non-management personnel, and to hire, train and motivate staff; the availability of capital, and our ability to obtain any required external financing on acceptable terms; our competitive strengths and the impact of competition; the accuracy of our financial models; trends in the retail cannabis and pharmacy sectors; the regulatory framework applicable to the retail cannabis and pharmacy industries in Canada, and the direction of any changes in that framework and underlying laws; and general economic, political and social conditions affecting the retail cannabis and pharmacy businesses.

Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that will cause actual results to differ from those indicated, suggested or anticipated in the forward-looking statements, and the differences may be material.  Readers must therefore exercise caution and not rely on forward-looking statements, which rest on assumptions, opinions, estimates, plans, beliefs and expectations as of the date made that may change, and are in any event not a guarantee of future performance or a promise of any future outcomes.  We believe such risks, uncertainties and other factors to include, without limitation, the following: risks associated with the retail cannabis and pharmacy industries generally; adverse changes in the general economic or market conditions, and to customer spending in the centers where we operate; unforeseen obstacles that prevent, delay or otherwise compromise the execution of our growth plan; inability to obtain additional licenses and authorizations (and other needed regulatory approvals) as and when required to fit our growth and business plan; ineffectively managing our growth; failure to secure desirable store locations; inability to secure leasehold premises for new stores on acceptable terms, risks associated with leasing retail space; adverse changes to the regulatory framework applicable to the retail cannabis industry in Canada, or to other laws and regulations affecting our business (including taxes); unanticipated diminishment of the Shiny Bud brand or any trademark protections; negative publicity for us or our business; marketing strategies that are less successful than expected; our highly competitive industry and the relative size and resources of some of our competitors; being unable to successfully open and operate new stores; profitability erosion from unexpected cost increases; slower profitability of new stores; failure to identify, recruit and contract with a sufficient number of qualified franchise partners; lack of access to capital to fund expansion, or more costly financing terms than expected; a data security breach that results in improper use or disclosure of confidential customer or employee information; risks associated with industry consolidation; loss of key management or other key personnel, or unexpected difficulty in attracting, training and/or motivating staff as necessary to execute our business plan; unexpected challenges in growing sales or connecting with our customer base; inability to meet other financial targets; any material claims made against us, which could result in litigation; insolvency risks with parties with whom we do business; increased expenses of being a public company; the forward-looking statements contained in this presentation proving to be inaccurate and incorrect despite there being a reasonable basis therefor at the time they were made; and such other risks, uncertainties and other factors as may be discussed or set out from time-to-time in ShinyBud's public disclosure documents (including, without limitation, those risks identified in the Company's management's discussion and analysis filed by the Company with applicable securities regulatory authorities in Canada and available at www.sedar.com.

The foregoing lists of material assumptions and risks, uncertainties and other factors are not exhaustive.

The forward-looking statements contained herein in this speak only as of the date of this news release. The Company disclaims any intention, obligation or undertaking to update or revise any forward looking statements, whether as a result of new information, future events or otherwise, or to explain any difference between actual results and those indicated, suggested or anticipated in any forward looking statements, except as may be required under applicable securities laws.

All forward-looking statements contained in this news release and in any related reports or disclosures filed or issued by the Company, or made by the Company's directors, officers and other persons authorized to speak on its behalf regarding the subject matter hereof, are expressly qualified by this cautionary statement.

SOURCE ShinyBud Corp.

Kevin Reed, Chairman & CEO, P: [phone] | E: [email protected]; Caterina De Rosa, Senior Director, IR & Corporate Communications, P: [phone] | E: [email protected]