GABY Reports Third Quarter Results for 2022

Highlights include:

Retail revenue of $5.4 million reflecting 4% growth over Q2 2022

Gross margin improved to 46% up from 39% over same quarter last year despite California headwinds

Reduced SG&A expenses by 9% in the quarter over the same quarter last year

New delivery record reached - serving 9,300 customers in Q3 2022

SAN DIEGO, CA / ACCESSWIRE / November 29, 2022 / GABY Inc. ("GABY" or the "Company") (CSE:GABY) (OTCQB:GABLF), a California consolidator of cannabis dispensaries and the parent company of San Diego's Mankind Dispensary ("Mankind"), reported its financial and operating results for the quarter ending September 30, 2022 ("Q3 2022") All financial information is provided in United States dollars unless otherwise indicated. GABYs financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS").

Third Quarter 2022 Financial & Operational Highlights

• Revenue for Q3 2022 was $5.4 million, which after adjustment for the closure of GABY's wholesale distribution business, is down $1.3 million or -20% over same quarter last year, but up $0.2 million or 4% over Q2 2022.
• Gross profit for Q3 2022 was $2.5 million which reflects an increase of $0.3 million over Q2 2022, with gross margin increasing by 3 percentage points over the same period and 7% points over same period last year.
• Adjusted EBITDA¹ was $0.1 million or $0.3 million down from $0.4 million in Q3 2021 on lower revenue as described above.
• The net loss of $3.8 million for Q3 2022 includes a (non-cash) $1.9 million foreign exchange loss on translation of the $25.5 million promissory note (the "Note") issued as consideration for the acquisition of the Mankind Dispensary on April 1, 2021, and was $0.3 million down from the same quarter last year.
• In Q3 2022 GABY's retail delivery business operating as "Mankind™" set a new delivery record, serving 9,360 customers which represents 10% more customers than the previous high earlier in the year and 15% more customers than Q2 2022. As more dispensaries continue to open in close proximity and thus in competition to Mankind, management is focused on growing this business unit to service customers well outside of the reach of its brick and mortar location.

Management is also focused on building its portfolio of proprietary brands to increase its unique product offerings and increase retail margins. Proprietary brands have an average margin of approximately 70%, are given priority shelf space and are emphasized by staff providing guidance to customers; moreover, given its value equation (price to quality) customers are naturally drawn to these products. Kind Republic™ was initially launched as a mid-tier flower brand. In the last 12 months revenue has been in excess of $1.2 million, with Q3 2022 experiencing 21% growth over the prior quarter. In Q3 development of a Kind Republic vape cartridge and pre-roll was completed for launch in Q4. GABY's DankSpace™ brand was launched in Q1 2022 as a high-end premium brand. In Q3 a sativa line of Dank Space was launched and 3 SKU's of pre-rolls were developed for launch in Q4. Management estimates that Dank Space sales are on pace to reach $700,000 annually and Dank Space'szero G-MO™ line of flower was the bestselling SKU at Mankind in 2022, outselling the next best-selling flower by more than double.