TAAT® Reports Second Quarter Fiscal 2022 Results with New Orders

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The company’s gross revenue increased 9.7% from the first quarter of fiscal year to the second quarter of fiscal year 2022, more than 54% of the gross revenue of the second quarter of fiscal year 2022 from repeat orders. Improved production efficiency/speed of TAAT®’s Beyond Tobacco™ base material using the advanced “V3” formulation partially contributed to the company’s gross margin improvement of 28.09% in the first quarter of fiscal 2022 to 46.1% in the second quarter of fiscal 2022.

LAS VEGAS and VANCOUVER British Columbia, June 29, 2022 (GLOBE NEWSWIRE) — TAAT® GLOBAL ALTERNATIVES INC. (CSE: TAAT) (OTCQX: TOBAF) (FRANKFURT: 2TP) (the “Company” or “TAAT®”) is pleased to announce several corporate developments reflected in its financial statements for the second quarter of fiscal 2022 (for the three-month period ended April 30, 2022). The Company’s flagship product, TAAT®, is currently sold in more than 2,700 stores in the United States, which include major national and global chain locations in the convenience and gas categories. As more TAAT® in retail circulation is now manufactured with the Version III (“V3”) of its patent-pending Beyond Tobacco™ base material, the Company and its wholesale/retail partners have generally observed improvements in conversion rates of adult smokers who choose TAAT® over their preferred brand of cigarettes of tobacco. An overview of the highlights reflected in the Company’s second quarter fiscal 2022 financial statements is provided below. Unless otherwise indicated, all monetary figures are in Canadian dollars.

TAAT® Second Quarter Fiscal 2022 Highlights

  • Sequential revenue growth of 9.7% in gross revenue, from $469,782 in the first quarter of Fiscal 2022 to $515,464 in the second quarter of Fiscal 2022;
  • The Company’s cost of goods sold increased from $337,817 in Q1 Fiscal 2022 to $277,846 in Q2 Fiscal 2022, reflecting a gross margin improvement of 28.09% in Q1 of the fiscal 2022 to 46.1% in Q2 fiscal 2022;
  • The Company’s reduced cost of goods sold and increased gross margin can in part be attributed to manufacturing efficiencies that are an inherent result of the Beyond Tobacco™ V3 formulation manufacturing process;
  • Repeat orders (“new orders”) from existing TAAT® accounts represented $279,875 or 54.29% of the company’s gross revenue of $515,464 in the second quarter of fiscal 2022;
  • One-time reverse logistics expenses reduced the company’s gross margin in the second quarter of fiscal 2022, primarily to effect the replacement of previous shipments of TAAT® with TAAT® manufactured using the V3 formulation of Beyond Tobacco™;
  • The Company has entered into an agreement to acquire ADCO Distributors, Inc. (“ADCO”), an Ohio tobacco distributor with 2021 net revenues exceeding C$87 million (as detailed in a press release dated February 25, 2022); and
  • The “TAAT®” brand name has become a registered trademark in eight global markets, including the United States and the European Union (as detailed in a press release dated March 25, 2022).

Please refer to the documents filed by the Company on SEDAR (http://sedar.com) for all information provided in the company’s second quarter fiscal 2022 financial statements.

Pictured above is ADCO’s 18,000 square foot warehouse (Canton, Ohio), where a staff of 28 handles full-service distribution of TAAT® as well as traditional tobacco products and a full line of convenience products. As announced during the Company’s second quarter of fiscal 2022, TAAT® entered into an agreement to acquire ADCO, which was ultimately finalized in May 2022.

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/f65d8a69-ec8a-427c-b4a9-bfb59f1d7d76

Readers using news aggregation services may not be able to view the above media. Please access SEDAR or Investor Relations section of the Company’s website for a version of this press release containing all published media.

TAAT® Founder Joe Deighan said, “Our second quarter of fiscal 2022 was a pivotal time for the company as we made two key transitions. The first was the acquisition of ADCO, which added integrated distribution to our business model in addition to a stable revenue stream of over C$87 million (based on 2021 financial results) to complete our existing TAAT® sales pipeline across the United States. The second was the rotation of TAAT® inventory with our wholesale and retail partners to ensure that TAAT® made with Beyond Tobacco™ V3 formulation is as available as possible in our national footprint. It is difficult to express how important V3 is compared to our previous formulations. Consumer feedback from adult smokers who have tried V3 reflects validation of our mission to create an experience that is truly better than their favorite brand of tobacco cigarettes. This has done wonders for our point-of-sale conversion rates, which is why we chose to take the plunge to voluntarily replace existing inventory with products manufactured using V3. With the additional distribution bandwidth resulting from our acquisition of ADCO, we are excited to continue as an integrated player in the US$812 billion global tobacco category, and are grateful to our loyal investor base for their continued support.

On behalf of the Company’s Board of Directors,

TAAT® GLOBAL ALTERNATIVES INC.

“Joe Deighan”

Joe Deighan, COO and Director

For more information, please contact:

TAAT® Investor Relations
1-833-TAAT-USA (1-833-822-8872)
[email protected]

THE CANADIAN SECURITIES EXCHANGE (CSE) HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ACCURACY OR SUITABILITY OF THIS RELEASE, NOR HAS NOR THE CSE’S REGULATORY SERVICE PROVIDER.

About TAAT® Global Alternatives Inc.

TAAT® develops, manufactures and distributes alternative products in categories such as tobacco, hemp, kratom and other emerging segments of the CPG industry. Its flagship product is a nicotine-free, tobacco-free cigarette with a patent-pending base material formulation, sold in more than 2,700 stores in the United States. With over $80 million CAD in overall net revenue in 2021, TAAT® facilities include a manufacturing facility in Nevada, as well as a distribution center and multiple convenience stores in Ohio.

For more information, please visit http://taatglobal.com.

Forward-looking statements

This press release contains “forward-looking information” within the meaning of applicable Canadian securities laws. Often, but not always, forward-looking information and information can be identified by the use of words such as “anticipates”, “expects” or “does not expect”, “is expected”, “estimates “, “intends to”, “anticipates” or “does not anticipate”, or “believes”, or variations of these words and expressions or declare that certain actions, events or results “may”, “might” , “would”, “could” or “will” take, occur or be realized. The forward-looking information contained in this press release includes statements regarding the anticipated performance of TAAT® in the tobacco industry, in addition to following: the potential results of the Company’s acquisition of ADCO and the replacement of previous shipments with inventory manufactured using Beyond Tobacco™ V3, and the Company’s continued performance, as disclosed in press release. Forward-looking information re reflect management’s current expectations based on information currently available and are subject to a number of risks and uncertainties that may cause actual results to differ materially from those discussed in the forward-looking information. Although the Company believes that the assumptions and factors used in the preparation of forward-looking information are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur within the time periods disclosed or not. at all. Factors that could cause actual results or events to differ materially from current expectations include: (i) adverse market conditions; (ii) changes in the growth and size of tobacco markets; (iii) changes in the regulatory landscape applicable to the Company’s activities; and (iv) other factors beyond the Company’s control. The Company operates in a rapidly changing environment. New risk factors emerge from time to time, and it is impossible for the management of the Company to predict all risk factors, nor can the Company assess the impact of all factors on the business of the Company. Company or the extent to which any factor, or combination of factors, could cause actual results to differ from those contained in the forward-looking information. The forward-looking information included in this press release is made as of the date of this press release, and the Company expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. , except as required by applicable law.

The statements in this press release have not been evaluated by Health Canada or the United States Food and Drug Administration. As each individual is different, the benefits, if any, of taking the Company’s products will vary from person to person. No claims or warranties can be made as to the effects of the Company’s products on the health and well-being of any individual. The Company’s products are not intended to diagnose, treat, cure or prevent any disease.

This press release may contain brand names of third-party entities (or their respective offerings with brand names) generally in reference to (i) the Company’s relationships with the third-party entities mentioned in this press release and/or (ii ) customers/suppliers/service providers whose relationship with the Company is/are mentioned in this press release. All rights in and to these marks are reserved by their respective owners or licensees.

Statement Regarding Third-Party Investor Relations Firms

Information about the investor relations firms retained by TAAT® Global Alternatives Inc. can be found under the company profile on http://sedar.com.

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