Financial Data and Key Metrics Changes - In Q1, the company achieved a gross revenue of $60.9 million, a 37% increase from the previous year, while net revenue grew 43% to $43.3 million [71][72] - The company reported a net income of $5.3 million compared to a net loss of $1.3 million in Q1 fiscal '22, marking a significant turnaround [73] - Adjusted EBITDA was positive at $5.6 million, a substantial improvement from negative $1.9 million in Q1 '22, driven by higher sales volumes and lower production costs [30][71] Business Line Data and Key Metrics Changes - The company introduced 17 new SKUs in Q1, including infused pre-rolls and the Holy Mountain brand, which is expected to enhance market presence [40][66] - The SHRED brand maintained its position as the number one in milled flower, with significant sales growth contributing to overall brand strength [66][71] - The company harvested approximately 22,000 kilograms of flower in Q1 '23, a 92% increase from about 12,000 kilograms in the same period last year [44][72] Market Data and Key Metrics Changes - The company reported leading market share in the maritime region and ranked number one in flowered gummies and hash in Ontario [39] - Sales in Quebec nearly tripled compared to Q1 of fiscal 2022, indicating strong market demand [39] - The company has seen a significant increase in shipments to international markets, with a 71% increase in dry flower shipments to Israel and Australia [23] Company Strategy and Development Direction - The company is focusing on profitable sales growth while managing market share, indicating a strategic shift towards sustainable profitability [2] - There is an ongoing exploration of international markets, particularly in Germany, while maintaining a strong domestic presence [9][113] - The company aims to enhance its innovation pipeline, particularly in the vape segment, to address underdevelopment in that area [66][119] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in revenue growth and market share expansion, particularly as the company has the capacity to meet demand [18][110] - The current market environment is characterized by price compression, particularly in large-format products, which has led to adjustments in pricing strategies [61][105] - Management remains cautious about the competitive landscape, noting that some competitors may struggle due to excess capacity [100][110] Other Important Information - The company has a strong cash position with $95 million in cash and short-term investments, positioning it well for potential M&A opportunities [74][62] - The transition to positive net income is attributed to improved gross margins and a fair value gain in biological assets [73] - The company is committed to its medical cannabis business, having added 26 SKUs to the Shoppers Drug Mart channel [41] Q&A Session All Questions and Answers Question: Can you comment on the potential for increased market share due to less competition? - Management believes there is an opportunity to grow revenue and market share, particularly as some competitors may exit the market due to financial struggles [18][100] Question: What are your expectations regarding price compression and its impact on gross margins? - Management acknowledges price compression in the Canadian market but remains hopeful that gross margins can be maintained despite these pressures [51][78] Question: How is the company planning to utilize its cash position? - The company plans to use its cash reserves for potential M&A opportunities while also considering returning some cash to shareholders if conditions stabilize [62][74]

This Management's Discussion and Analysis dated January 11, 2023 (this "MD&A"), should be read in conjunction with the unaudited condensed consolidated interim financial statements (the "Interim Financial Statements") of Organigram Holdings Inc. (the "Company" or "Organigram") for the three months ended November 30, 2022 ("Q1 Fiscal 2023") and the audited annual consolidated financial statements for the year ended August 31, 2022 (the "Annual Financial Statements"), including the accompanying notes thereto. ...

👍ORGANIGRAM INVESTOR PRESENTATION NASDAQ (OGI) TSX (OGI) Q4 Fiscal 2022 11 | 29 | 22 1 CAUTIONARY STATEMENT This document is current as of November 28, 2022, except where otherwise stated. The information contained in this presentation is provided by Organigram Holdings Inc. ("Organigram" or the "Company") for informational purposes only and does not constitute an offer to issue or arrange to issue, or the solicitation of an offer to issue, securities of Organigram or other financial products. No part of th ...

OrganiGram Holdings Inc. (NASDAQ:OGI) Q4 2022 Results Conference Call November 29, 2022 8:00 AM ET Company Participants Craig MacPhail - Group Director, NATIONAL Capital Markets Beena Goldenberg - Chief Executive Officer Derrick West - Chief Financial Officer Conference Call Participants Tamy Chen - BMO Capital Markets Ty Collin - Eight Capital Aaron Grey - Alliance Global Partners Andrew Partheniou - Stifel Matt Bottomley - Canaccord Genuity Michael Freeman - Raymond James Frederico Gomes - ATB Operator Go ...

[Financial Statements](index=2&type=section&id=Financial%20Statements) [Condensed Consolidated Interim Statements of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Financial%20Position) As of May 31, 2022, Organigram Holdings Inc. reported total assets of **$583.6 million**, a slight increase from **$554.0 million** at August 31, 2021. The growth was driven by a significant rise in cash to **$127.3 million** and an increase in intangible assets and goodwill to **$57.3 million**, primarily due to acquisitions. This was partially offset by a large decrease in short-term investments. Total liabilities decreased slightly to **$72.2 million** from **$74.2 million**, mainly due to a reduction in derivative liabilities. Consequently, shareholders' equity increased to **$511.4 million** from **$479.8 million**. Consolidated Balance Sheet Summary (in CDN $000's) | Account | May 31, 2022 | August 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $227,755 | $260,615 | | **Total Assets** | **$583,565** | **$554,017** | | **Total Current Liabilities** | $54,649 | $26,266 | | **Total Liabilities** | **$72,205** | **$74,212** | | **Total Shareholders' Equity** | **$511,360** | **$479,805** | | **Total Liabilities & Equity** | **$583,565** | **$554,017** | - Cash increased significantly to **$127.3 million** from **$55.4 million**, while short-term investments decreased from **$128.2 million** to just **$20 thousand**[2](index=2&type=chunk) - Intangible assets and goodwill more than tripled to **$57.3 million** from **$17.0 million**, reflecting recent acquisition activity[2](index=2&type=chunk) - Derivative liabilities saw a substantial decrease to **$8.3 million** from **$37.5 million**[2](index=2&type=chunk) [Condensed Consolidated Interim Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended May 31, 2022, the company reported a net loss of **$2.8 million** on net revenue of **$38.1 million**, a significant improvement from a **$4.0 million** net loss on **$20.3 million** revenue in the prior-year period. For the nine-month period, the net loss narrowed dramatically to **$8.1 million** from **$104.7 million** year-over-year, primarily due to a large positive change in the fair value of derivative liabilities in 2022 compared to a large negative change in 2021. Gross margin before fair value adjustments turned positive for both the three and nine-month periods. Key Performance Indicators (in CDN $000's, except per share data) | Metric | Three Months Ended May 31, 2022 | Three Months Ended May 31, 2021 | Nine Months Ended May 31, 2022 | Nine Months Ended May 31, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $38,115 | $20,324 | $100,329 | $54,298 | | Gross Margin | $7,642 | $2,119 | $17,321 | ($31,750) | | Loss from Operations | ($11,938) | ($12,215) | ($34,611) | ($69,700) | | Net Loss | ($2,787) | ($4,008) | ($8,139) | ($104,733) | | Net Loss per Share (basic) | ($0.009) | ($0.014) | ($0.026) | ($0.433) | - Net revenue for the third quarter increased by **88%** year-over-year, and by **85%** for the nine-month period[5](index=5&type=chunk) - A significant factor in the reduced nine-month net loss was a **$29.2 million** gain from the change in fair value of derivative liabilities in 2022, compared to a **$35.0 million** loss in the same period of 2021[5](index=5&type=chunk) [Condensed Consolidated Interim Statements of Changes in Equity](index=7&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Changes%20in%20Equity) Shareholders' equity increased from **$479.8 million** at the beginning of the period to **$511.4 million** as of May 31, 2022. The increase was primarily driven by the issuance of shares for business combinations totaling **$31.0 million** and the exercise of top-up rights for **$6.3 million**. These additions were partially offset by a net loss of **$8.1 million** for the nine-month period. Equity Roll-Forward for Nine Months Ended May 31, 2022 (in CDN $000's) | Description | Amount | | :--- | :--- | | **Balance - September 1, 2021** | **$479,805** | | Shares issued for business combinations | $31,001 | | Share-based compensation | $2,318 | | Exercise of top-up rights, net | $6,334 | | Net loss | ($8,139) | | Other (exercises, etc.) | $41 | | **Balance - May 31, 2022** | **$511,360** | [Condensed Consolidated Interim Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Cash%20Flows) For the nine months ended May 31, 2022, the company experienced a net cash increase of **$72.0 million**, resulting in an ending cash position of **$127.3 million**. This was a significant improvement from the **$33.8 million** increase in the prior-year period. The positive change was driven by **$83.0 million** in net cash provided by investing activities, primarily from the proceeds of short-term investments, which more than offset the **$16.5 million** used in operating activities. Financing activities provided a modest **$5.5 million**. Cash Flow Summary for Nine Months Ended (in CDN $000's) | Activity | May 31, 2022 | May 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($16,516) | ($20,890) | | Net cash provided by (used in) financing activities | $5,489 | $174,408 | | Net cash provided by (used in) investing activities | $82,998 | ($119,726) | | **Increase in Cash** | **$71,971** | **$33,792** | | **Cash, End of Period** | **$127,336** | **$58,392** | - The significant swing in investing cash flow was due to receiving **$128.2 million** in proceeds from short-term investments in 2022, compared to a net purchase of investments in 2021[10](index=10&type=chunk) - Financing activities in the prior year were substantially higher due to **$64.8 million** in proceeds from unit financing and **$220.0 million** from share issue costs, which were absent in the current period[10](index=10&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [Note 1: Nature of Operations](index=10&type=section&id=1.%20NATURE%20OF%20OPERATIONS) Organigram Holdings Inc. is a publicly traded company on the TSX and NASDAQ under the symbol "OGI". It operates primarily through its wholly-owned subsidiaries, which are licensed producers and processors of cannabis and cannabis-derived products in Canada. - The company's major wholly-owned subsidiaries include: - Organigram Inc. (licensed producer) - 10870277 Canada Inc. (holding company) - The Edibles and Infusions Corporation (EIC) (processor of confectionary goods) - Laurentian Organic Inc. (Laurentian) (producer of artisanal craft cannabis and hash)[14](index=14&type=chunk) [Note 2: Basis of Preparation](index=10&type=section&id=2.%20BASIS%20OF%20PREPARATION) The unaudited condensed consolidated interim financial statements were prepared in accordance with IAS 34 and should be read with the annual statements. The statements are prepared on a historical cost basis, with exceptions for certain assets and liabilities measured at fair value. The company acknowledges the ongoing uncertainty of the COVID-19 pandemic but did not record any direct adjustments to asset carrying values during the period. - The financial statements were prepared in accordance with International Accounting Standard 34 Interim Financial Reporting ("IAS 34")[15](index=15&type=chunk) - Due to COVID-19 uncertainty, the company notes that estimates in the financial statements could change in the near-term, potentially leading to material impacts such as impairment of inventories and long-lived assets[24](index=24&type=chunk) [Note 3: Significant Accounting Policies](index=11&type=section&id=3.%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The company has not yet adopted several new IFRS standards and amendments that are effective after August 31, 2022. These include changes to IAS 1 (Classification of Liabilities, Disclosure of Accounting Policies), IAS 8 (Definition of Accounting Estimate), IAS 12 (Deferred Tax), IAS 37 (Onerous Contracts), IAS 16 (Property Plant and Equipment), IFRS 9 (Financial Instruments), and IAS 41 (Agriculture). The company is currently evaluating the potential impact of these amendments. - The company is assessing the impact of several upcoming amendments to IFRS standards, including those related to the classification of liabilities, definition of accounting estimates, and disclosure of accounting policies, which are effective for periods beginning on or after January 1, 2023[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) [Note 4: Short Term Investments](index=12&type=section&id=4.%20SHORT%20TERM%20INVESTMENTS) The company's short-term investments decreased dramatically from **$128.2 million** at August 31, 2021, to **$20 thousand** at May 31, 2022. The prior year's balance was primarily held in Guaranteed Investment Certificates (GICs) which have since matured. Short-Term Investments (in CDN $000's) | Description | May 31, 2022 | August 31, 2021 | | :--- | :--- | :--- | | GIC - maturing November 2, 2021 | $ — | $ 60,000 | | GIC - maturing May 4, 2022 | $ — | $ 60,138 | | GIC - maturing May 27, 2022 | $ — | $ 8,032 | | Bond - Canada Revenue Agency | $ 20 | $ 20 | | **Total** | **$ 20** | **$ 128,190** | [Note 5: Accounts Receivable](index=13&type=section&id=5.%20ACCOUNTS%20RECEIVABLE) Accounts receivable increased to **$34.5 million** as of May 31, 2022, from **$21.0 million** at August 31, 2021. The rise was driven by a significant increase in gross trade receivables, reflecting higher sales. Accounts Receivable Breakdown (in CDN $000's) | Component | May 31, 2022 | August 31, 2021 | | :--- | :--- | :--- | | Gross trade receivables | $ 33,651 | $ 20,915 | | Less: reserves & credit losses | ($671) | ($710) | | **Trade receivables** | **$ 32,980** | **$ 20,205** | | Other receivables | $ 1,555 | $ 830 | | **Total Accounts Receivable** | **$ 34,535** | **$ 21,035** | [Note 6: Loan Receivable](index=13&type=section&id=6.%20LOAN%20RECEIVABLE) The loan receivable from 1812 Hemp, which had a carrying value of **$250 thousand** at August 31, 2021, was fully impaired during the period. An additional impairment charge of **$250 thousand** was recorded at November 30, 2021, reducing the balance to zero. - At November 30, 2021, the remaining **$250 thousand** balance of the loan receivable from 1812 Hemp was fully impaired, reducing the carrying value to **$nil**[41](index=41&type=chunk) [Note 7: Biological Assets](index=13&type=section&id=7.%20BIOLOGICAL%20ASSETS) The carrying value of biological assets (cannabis plants) was **$12.5 million** at May 31, 2022, a slight increase from **$12.1 million** at August 31, 2021. During the nine-month period, the company recognized an unrealized gain of **$24.3 million** on changes in the fair value of these assets. The fair value is determined using a model based on expected harvest yield, selling price, and costs to complete. Biological Assets Continuity (in CDN $000's) | Description | Amount | | :--- | :--- | | **Balance, August 31, 2021** | **$12,122** | | Acquisition through business combination | $183 | | Unrealized gain on changes in fair value | $24,324 | | Production costs capitalized | $35,381 | | Transfer to inventory upon harvest | ($59,477) | | **Balance, May 31, 2022** | **$12,533** | - As of May 31, 2022, the company's biological assets are expected to yield **20,946 kg** of cannabis, a significant increase from the **11,368 kg** expected at August 31, 2021[45](index=45&type=chunk) [Note 8: Inventories](index=15&type=section&id=8.%20INVENTORIES) Inventories increased to **$48.0 million** at May 31, 2022, from **$36.7 million** at August 31, 2021. The increase was seen across various categories, including packaged inventory and packaging supplies. For the nine months ended May 31, 2022, the amount of inventory expensed in cost of sales was **$65.9 million**, and inventory provisions and waste totaled **$6.8 million**. Inventory Breakdown (in CDN $000's) | Category | May 31, 2022 | August 31, 2021 | | :--- | :--- | :--- | | Plants in drying stage | $2,089 | $2,690 | | Dry cannabis | $27,367 | $21,495 | | Formulated extracts | $5,058 | $2,746 | | Packaging and supplies | $8,253 | $6,023 | | **Total Carrying Value** | **$48,046** | **$36,696** | - For the nine months ended May 31, 2022, inventory provisions and waste were **$6.8 million**, significantly lower than the **$22.3 million** recorded in the same period of 2021[50](index=50&type=chunk) [Note 9: Property, Plant and Equipment](index=16&type=section&id=9.%20PROPERTY,%20PLANT%20AND%20EQUIPMENT) The net book value of property, plant, and equipment (PP&E) increased to **$250.5 million** at May 31, 2022, from **$235.9 million** at August 31, 2021. The increase was driven by additions of **$32.8 million** and acquisitions through business combinations of **$6.2 million**, partially offset by depreciation of **$16.5 million** and disposals. An impairment loss of **$2.0 million** was recognized on the Moncton chocolate manufacturing line. PP&E Continuity (in CDN $000's) | Description | Amount | | :--- | :--- | | **Net Book Value, August 31, 2021** | **$235,939** | | Acquisitions through business combinations | $6,240 | | Additions | $32,768 | | Disposals (Net) | ($5,996) | | Impairment | ($2,000) | | Depreciation | ($16,482) | | **Net Book Value, May 31, 2022** | **$250,469** | - The company recognized a **$2.0 million** impairment loss on its Moncton chocolate line after making a strategic decision to cease manufacturing chocolate at that location[55](index=55&type=chunk) [Note 10: Intangible Assets and Goodwill](index=18&type=section&id=10.%20INTANGIBLE%20ASSETS%20AND%20GOODWILL) The net book value of intangible assets and goodwill surged to **$57.3 million** at May 31, 2022, from **$17.0 million** at August 31, 2021. This increase is almost entirely due to acquisitions through business combinations, which added **$27.7 million** in goodwill and **$14.2 million** in other intangible assets like licenses and brands. Intangible Assets & Goodwill Continuity (in CDN $000's) | Description | Goodwill | Other Intangibles | Total | | :--- | :--- | :--- | :--- | | **Net Book Value, Aug 31, 2021** | **$14,321** | **$2,725** | **$17,046** | | Acquisitions | $27,658 | $14,217 | $41,875 | | Additions | $— | $30 | $30 | | Disposals (Net) | $— | ($11) | ($11) | | Amortization | $— | ($1,678) | ($1,678) | | **Net Book Value, May 31, 2022** | **$41,979** | **$15,283** | **$57,262** | [Note 11: Other Liabilities](index=18&type=section&id=11.%20OTHER%20LIABILITIES) Current other liabilities increased significantly to **$15.1 million** at May 31, 2022, from **$4.5 million** at August 31, 2021. The increase was primarily due to a rise in contingent consideration related to acquisitions and a higher current portion of lease liabilities. Other Liabilities Breakdown (in CDN $000's) | Component | May 31, 2022 | August 31, 2021 | | :--- | :--- | :--- | | Advance from joint operator | $3,172 | $— | | Contingent consideration | $7,027 | $3,500 | | Current portion lease liability | $4,888 | $984 | | **Total** | **$15,087** | **$4,484** | [Note 12: Provisions](index=20&type=section&id=12.%20PROVISIONS) The company maintains a provision for litigation, which stood at **$2.6 million** as of May 31, 2022, a slight decrease from **$2.8 million** at August 31, 2021. The provision is related to outstanding legal matters as detailed in Note 23. Legal Provision Continuity (in CDN $000's) | Description | Amount | | :--- | :--- | | **Balance - August 31, 2021** | **$2,750** | | Additions | $222 | | Payments | ($412) | | **Balance - May 31, 2022** | **$2,560** | [Note 13: Long-Term Debt](index=20&type=section&id=13.%20LONG-TERM%20DEBT) Total long-term debt, including the current portion, was minimal at **$254 thousand** as of May 31, 2022, down from **$310 thousand** at August 31, 2021. The debt consists primarily of a loan from the Atlantic Canada Opportunities Agency (ACOA) and vehicle loans, with scheduled principal repayments extending over the next three years. Principal Repayments Schedule (in CDN $000's) | Period | Amount | | :--- | :--- | | Less than 1 year | $80 | | 1 to 2 years | $80 | | 2 to 3 years | $64 | | 3 to 4 years | $30 | | **Total** | **$254** | [Note 14: Derivative Liabilities](index=20&type=section&id=14.%20DERIVATIVE%20LIABILITIES) Derivative liabilities, consisting of warrants and top-up rights, decreased significantly to **$8.3 million** at May 31, 2022, from **$37.5 million** at August 31, 2021. The reduction was primarily due to a revaluation of the warrant liabilities, reflecting a lower share price and volatility, resulting in a fair value gain of **$29.2 million** for the nine-month period. [Warrants](index=20&type=section&id=14.1%20Warrants) The fair value of outstanding warrants decreased from **$35.0 million** at August 31, 2021, to **$7.5 million** at May 31, 2022. This revaluation resulted in a gain of **$27.5 million** for the nine months ended May 31, 2022. The change was driven by a lower market price of common shares and decreased expected volatility. Warrant Fair Value Inputs | Input | May 31, 2022 | August 31, 2021 | | :--- | :--- | :--- | | Market price of Common Shares | $1.47 | $3.38 | | Expected future volatility | 95.60% | 100.00% | | Life of Warrants (years) | 1.45 | 2.20 | | **Fair value per warrant** | **$0.44** | **$2.07** | [Top-up Rights](index=22&type=section&id=14.2%20Top-up%20Rights) The fair value of Top-up Rights, granted to BAT, decreased from **$2.5 million** at August 31, 2021, to **$0.8 million** at May 31, 2022. During the nine-month period, **2.7 million** Top-up Rights were exercised for gross proceeds of **$6.3 million**. The revaluation resulted in a fair value gain of **$1.7 million**. - During the nine months ended May 31, 2022, **2,659,716** Top-up Rights were exercised for gross proceeds of **$6.3 million**[73](index=73&type=chunk) - The fair value of the Top-up Rights liability was revalued to **$808 thousand** at May 31, 2022, down from **$2.5 million** at August 31, 2021[75](index=75&type=chunk) [Note 15: Share Capital](index=23&type=section&id=15.%20SHARE%20CAPITAL) As of May 31, 2022, the company had **313.7 million** common shares issued and outstanding, an increase from **298.8 million** at August 31, 2021. The increase was primarily due to the issuance of **10.9 million** shares for the Laurentian acquisition and **1.0 million** shares for the EIC acquisition milestone, as well as the exercise of **2.7 million** top-up rights. Share-based compensation expense for the nine months was **$2.3 million**. [Issuances of Share Capital](index=23&type=section&id=15.1%20Issuances%20of%20share%20capital) During the nine months ended May 31, 2022, the company issued **10.9 million** shares valued at **$27.6 million** for the acquisition of Laurentian, **1.0 million** shares valued at **$3.5 million** for an EIC milestone, and **2.7 million** shares for the exercise of top-up rights, generating **$6.3 million** in cash. - Issued **10,896,442** Common Shares valued at **$27.6 million** for the acquisition of Laurentian Organic Inc[79](index=79&type=chunk) - Issued **1,039,192** Common Shares valued at **$3.5 million** upon EIC's achievement of its first milestone earnout[80](index=80&type=chunk) - Issued **2,659,716** shares from the exercise of top-up rights for cash proceeds of **$6.3 million**[86](index=86&type=chunk) [Share-based Compensation](index=25&type=section&id=15.2%20Share-based%20compensation) For the nine months ended May 31, 2022, total share-based compensation charges were **$2.3 million**. As of May 31, 2022, there were **7.8 million** stock options, **1.4 million** RSUs, and **0.3 million** PSUs outstanding. Share-Based Compensation Expense (in CDN $000's) | Period | May 31, 2022 | May 31, 2021 | | :--- | :--- | :--- | | Three Months Ended | $761 | $973 | | Nine Months Ended | $2,318 | $2,746 | [Loss per Share](index=28&type=section&id=15.3%20Loss%20per%20share) Basic and diluted net loss per share for the nine months ended May 31, 2022, was **$0.026**. A total of **32.8 million** securities, including stock options, warrants, and RSUs, were considered anti-dilutive and therefore excluded from the diluted loss per share calculation. Anti-Dilutive Securities (Nine Months Ended May 31, 2022) | Security Type | Number Outstanding | | :--- | :--- | | Stock options | 7,798,872 | | Warrants | 16,943,650 | | Top-up rights | 6,388,579 | | Restricted share units | 1,355,036 | | Performance share units | 275,806 | | **Total** | **32,761,943** | [Note 16: Other Long-Term Liabilities](index=28&type=section&id=16.%20OTHER%20LONG-TERM%20LIABILITIES) Other long-term liabilities decreased to **$5.0 million** at May 31, 2022, from **$10.2 million** at August 31, 2021. The decrease was primarily due to a reduction in the long-term portion of contingent share consideration. The balance consists of contingent share consideration related to acquisitions and long-term lease liabilities. [Contingent Share Consideration](index=30&type=section&id=16.1%20Contingent%20share%20consideration) The company has contingent share consideration liabilities related to the acquisitions of EIC and Laurentian. As of May 31, 2022, the fair value of the EIC liability was revalued to **$7.0 million** (all current), and the Laurentian liability was revalued to **$2.6 million**. The revaluation of the Laurentian liability resulted in a fair value gain of **$4.4 million** for the nine-month period. - The fair value of the contingent liability for the Laurentian acquisition was revalued to **$2.6 million**, resulting in a gain of **$4.4 million** for the nine months ended May 31, 2022[104](index=104&type=chunk) - The fair value of the contingent liability for the EIC acquisition was revalued to **$7.0 million**, resulting in an expense of **$1.5 million** for the nine months ended May 31, 2022[103](index=103&type=chunk) [Leases](index=30&type=section&id=16.2%20Leases) Total lease liabilities increased to **$7.3 million** at May 31, 2022, from **$5.6 million** at August 31, 2021. The increase was driven by lease additions of **$2.0 million** and leases acquired through business combinations. The company holds leases for corporate offices and a manufacturing facility in Winnipeg. Lease Liability Continuity (in CDN $000's) | Description | May 31, 2022 | | :--- | :--- | | **Opening balance, September 1** | **$5,635** | | Acquisitions through business combinations | $452 | | Lease additions | $1,968 | | Lease payments | ($1,029) | | Interest expense | $305 | | **Ending balance** | **$7,331** | [Note 17: Investments in Associates](index=31&type=section&id=17.%20INVESTMENTS%20IN%20ASSOCIATES) The carrying value of investments in associates increased to **$6.8 million** at May 31, 2022, from **$5.0 million** at August 31, 2021. The increase was due to an additional **$2.5 million** investment in Hyasynth Biologicals Inc. The investment in alpha-cannabis Pharma GmbH remains impaired at a value of **$nil**. - On December 22, 2021, the company advanced an additional **$2.5 million** to Hyasynth Biologicals Inc., bringing its total investment to **$10.0 million** and its potential ownership to **48.9%**[124](index=124&type=chunk) - The investment in alpha-cannabis® Pharma GmbH was previously impaired to **$nil** during the year ended August 31, 2021, due to financial difficulties and a decline in market share[118](index=118&type=chunk) [Note 18: Related Party Transactions](index=34&type=section&id=18.%20RELATED%20PARTY%20TRANSACTIONS) The company incurred **$5.2 million** in compensation for key management and the Board of Directors for the nine months ended May 31, 2022, up from **$4.0 million** in the prior year. Additionally, under the Product Development Collaboration Agreement with BAT, the company incurred **$4.5 million** of direct expenses and capital expenditures related to the Center of Excellence. Key Management Compensation (in CDN $000's) | Component | Nine Months Ended May 31, 2022 | Nine Months Ended May 31, 2021 | | :--- | :--- | :--- | | Salaries and consulting fees | $2,824 | $2,305 | | Share-based compensation | $2,348 | $1,660 | | **Total** | **$5,172** | **$3,965** | - For the nine months ended May 31, 2022, the company incurred **$4.5 million** in direct expenses and capital expenditures for the Center of Excellence, a joint operation with BAT[130](index=130&type=chunk) [Note 19: Capital Management](index=34&type=section&id=19.%20CAPITAL%20MANAGEMENT) The company defines its capital as long-term debt, derivative liabilities, and all components of shareholders' equity, which totaled **$519.9 million** at May 31, 2022. The company manages its capital structure to fund its growth, and its approach has remained unchanged during the period. - The company's managed capital, consisting of debt, derivative liabilities, and equity, was **$519.9 million** at May 31, 2022, compared to **$517.6 million** at August 31, 2021[132](index=132&type=chunk) [Note 20: Fair Value of Financial Instruments and Financial Risk Factors](index=34&type=section&id=20.%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS%20AND%20FINANCIAL%20RISK%20FACTORS) The company uses a three-level hierarchy for fair value measurements. Contingent share considerations for EIC and Laurentian, and Top-up Rights are valued using Level 3 inputs (unobservable), making them sensitive to management's expectations and assumptions. Derivative warrant liabilities are valued using Level 1 and 2 inputs. The company is exposed to credit risk, primarily from trade receivables, and liquidity risk, which it manages by monitoring capital requirements. - The fair value of contingent share consideration for the EIC and Laurentian acquisitions is based on Level 3 unobservable inputs, including probabilities of achieving milestones and future EBITDA projections[138](index=138&type=chunk)[140](index=140&type=chunk) - The company's maximum exposure to credit risk at May 31, 2022, was approximately **$196.8 million**, primarily from cash, receivables, and restricted funds[145](index=145&type=chunk) - As of May 31, 2022, the company had contractual commitments for approximately **$20.4 million** in capital expenditures, mostly for its Moncton Campus[149](index=149&type=chunk) [Note 21: Revenue](index=36&type=section&id=21.%20REVENUE) Net revenue for the nine months ended May 31, 2022, was **$100.3 million**, an **85%** increase from **$54.3 million** in the prior-year period. The growth was driven by a substantial increase in adult-use recreational wholesale revenue, which grew to **$127.1 million** (gross) from **$64.5 million**. International wholesale revenue also saw significant growth. Gross Revenue by Category (in CDN $000's) | Category | Nine Months Ended May 31, 2022 | Nine Months Ended May 31, 2021 | | :--- | :--- | :--- | | Adult-use recreational wholesale (Canadian) | $127,115 | $64,457 | | Medical revenue (Canadian) | $6,091 | $6,735 | | International wholesale (business to business) | $9,242 | $386 | | Wholesale to licensed producers (Canadian) | $914 | $1,901 | | Other revenue | $90 | $198 | | **Gross Revenue** | **$143,452** | **$73,677** | [Note 22: Cost of Sales](index=38&type=section&id=22.%20COST%20OF%20SALES) Cost of sales includes the cost of inventories, shipping, and production overhead. For the nine months ended May 31, 2022, the company recorded provisions for excess and obsolete inventories of **$2.9 million**, a significant reduction from **$17.3 million** in the prior-year period. Additionally, charges for unabsorbed fixed overhead related to reduced production volumes were **$0.7 million**, down from **$6.7 million** year-over-year. - Charges for unabsorbed fixed overhead due to reduced production volumes decreased to **$709 thousand** for the nine months ended May 31, 2022, compared to **$6.7 million** in the prior-year period[156](index=156&type=chunk) [Note 23: Contingencies](index=38&type=section&id=23.%20CONTINGENCIES) The company is involved in a class-action lawsuit related to product recalls in 2016 and 2017. A settlement agreement has been reached for an aggregate of **$2.3 million**, pending court approval. The company received insurance proceeds of **$532 thousand** to cover remaining costs. Another proposed class-action lawsuit in Alberta regarding THC/CBD content is pending certification. A provision of **$2.6 million** for claims was recorded on the balance sheet. - A settlement agreement for **$2.3 million** has been reached in the Nova Scotia class-action lawsuit, subject to court approval[162](index=162&type=chunk) - The company received insurance proceeds of **$532 thousand** during the quarter, resulting in a net recovery of **$310 thousand** related to litigation for the period[162](index=162&type=chunk)[165](index=165&type=chunk) [Note 24: General and Administrative Expenses by Nature](index=39&type=section&id=24.%20GENERAL%20AND%20ADMINISTRATIVE%20EXPENSES%20BY%20NATURE) General and administrative (G&A) expenses for the nine months ended May 31, 2022, totaled **$31.4 million**, an increase from **$22.6 million** in the prior-year period. The increase was primarily driven by higher wages and benefits, office and general expenses, and professional fees. G&A Expense Breakdown (in CDN $000's) | Category | Nine Months Ended May 31, 2022 | Nine Months Ended May 31, 2021 | | :--- | :--- | :--- | | Office and general | $11,851 | $9,965 | | Wages and benefits | $9,161 | $6,631 | | Professional fees | $5,504 | $4,251 | | Depreciation and amortization | $3,770 | $1,618 | | Other | $1,076 | $123 | | **Total G&A Expenses** | **$31,362** | **$22,588** | [Note 25: Income Taxes](index=39&type=section&id=25.%20INCOME%20TAXES) As of May 31, 2022, the company recorded income taxes payable of **$1.1 million** and a deferred tax liability of **$4.1 million**. Both liabilities arose from the acquisition of Laurentian, specifically related to the temporary differences on the intangible assets acquired. - The company recognized a deferred tax liability of **$4.1 million** and income taxes payable of **$1.1 million**, both resulting from the acquisition of Laurentian[168](index=168&type=chunk) [Note 26: Government Subsidies](index=39&type=section&id=26.%20GOVERNMENT%20SUBSIDIES) For the nine months ended May 31, 2022, the company did not qualify for federal COVID-19 relief programs like CEWS or CERS. It did, however, receive **$154 thousand** in wage subsidies from the Manitoba government. This is a significant decrease from the **$7.3 million** in federal subsidies received in the prior-year period. - The company received **$154 thousand** in government subsidies for the nine months ended May 31, 2022, compared to **$7.3 million** in the same period of 2021[169](index=169&type=chunk) [Note 27: Product Development Collaboration](index=39&type=section&id=27.%20PRODUCT%20DEVELOPMENT%20COLLABORATION) The company has a Product Development Collaboration Agreement with BAT, establishing a Center of Excellence (CoE) at the Moncton Campus to develop new cannabis products. The CoE is accounted for as a joint operation, with costs funded equally by both parties. As of May 31, 2022, the balance in restricted funds for CoE obligations was **$34.9 million**. - The Center of Excellence (CoE) is a **50/50** joint operation with BAT, focused on R&D for next-generation cannabis products[170](index=170&type=chunk)[173](index=173&type=chunk) - For the nine months ended May 31, 2022, the company recognized **$2.0 million** as its share of expenses incurred by the CoE[173](index=173&type=chunk) [Note 28: Acquisition of Subsidiaries](index=40&type=section&id=28.%20ACQUISITION%20OF%20SUBSIDIARIES) The company completed the acquisition of Laurentian Organic Inc. on December 21, 2021, for total consideration of **$43.1 million**, including cash, shares, and contingent consideration, resulting in **$29.0 million** of goodwill. The acquisition of The Edibles and Infusions Corporation (EIC) from April 2021 involved total consideration of **$27.2 million**, resulting in **$13.0 million** of goodwill. [Laurentian Organic Inc.](index=40&type=section&id=28.1%20Laurentian%20Organic%20Inc.) On December 21, 2021, the company acquired **100%** of Laurentian for **$36.0 million** in initial consideration (**$10.0 million** cash, **$26.0 million** shares), plus contingent consideration valued at **$7.0 million** at acquisition. The acquisition is expected to enhance the company's position in the craft flower and hash market. The provisional purchase accounting identified **$14.1 million** in net assets, resulting in **$29.0 million** of goodwill. Laurentian Acquisition Summary (in CDN $000's) | Component | Fair Value on Acquisition | | :--- | :--- | | Total identifiable net assets | $14,138 | | **Consideration Transferred** | | | Cash consideration | $10,000 | | Equity instruments | $27,568 | | Contingent share consideration | $6,996 | | Working capital adjustments | ($1,461) | | **Total Consideration** | **$43,103** | | **Goodwill arising on acquisition** | **$28,965** | [The Edibles and Infusions Corporation](index=41&type=section&id=28.2%20The%20Edibles%20and%20Infusions%20Corporation) The acquisition of EIC on April 6, 2021, involved initial share consideration of **$22.0 million** and contingent consideration valued at **$5.2 million** at acquisition. The purchase accounting, which was finalized in the current period, identified **$14.2 million** in net assets, resulting in **$13.0 million** of goodwill. The goodwill is attributed to EIC's skilled workforce and expected synergies. - The acquisition of EIC resulted in **$13.0 million** of goodwill, attributed to the skills of EIC's workforce and expected synergies[192](index=192&type=chunk)[194](index=194&type=chunk) - The first milestone of the contingent consideration, valued at **$3.5 million**, was achieved and settled with shares on September 8, 2021[186](index=186&type=chunk)[190](index=190&type=chunk) [Note 29: Operating Segments](index=42&type=section&id=29.%20OPERATING%20SEGMENTS) The company operates as a single operating segment. The chief operating decision maker reviews financial information on a consolidated basis to make decisions about resource allocation and assess performance. - The company has determined that it has only one operating segment[195](index=195&type=chunk) [Note 30: Comparative Figures](index=42&type=section&id=30.%20COMPARATIVE%20FIGURES) Certain figures from the prior period's financial statements have been reclassified to conform with the current period's presentation. These reclassifications, which include separating research and development from G&A and disaggregating fair value adjustments, did not impact net loss or shareholders' equity. - Reclassifications were made to prior period figures to enhance comparability, such as separating Research and Development expenses from General and Administrative expenses[196](index=196&type=chunk)[199](index=199&type=chunk)

OrganiGram Holdings Inc. (NASDAQ:OGI) Q3 2022 Earnings Conference Call July 14, 2022 8:00 AM ET Company Participants Craig MacPhail - Group Director, NATIONAL Capital Markets Beena Goldenberg - Chief Executive Officer Derrick West - Chief Financial Officer Conference Call Participants Rupesh Parikh - Oppenheimer& Co. Andrew Partheniou - Stifel GMP Aaron Grey - Alliance Global Partners Ty Collin - Eight Capital Matt Bottomley - Canaccord Genuity Frederico Gomes - ATB Capital Markets Tamy Chen - BMO Capital M ...

OrganiGram Holdings Inc. (NASDAQ:OGI) Q2 2022 Earnings Conference Call April 12, 2022 8:00 AM ET Company Participants Craig MacPhail - Group Director, NATIONAL Capital Markets Beena Goldenberg - Chief Executive Officer Derrick West - Chief Financial Officer Conference Call Participants Aaron Grey - Alliance Global Partners Tamy Chen - BMO Capital Markets Matt Bottomley - Canaccord Genuity Douglas Miehm - RBC Capital Markets Ty Collin - Eight Capital Frederico Gomes - ATB Capital Markets Owen Bennett - Jeffe ...

TABLE OF CONTENTS | Condensed Consolidated Interim Statements of Financial Position | 1 | | --- | --- | | Condensed Consolidated Interim Statements of Operations and Comprehensive Loss | 2 | | Condensed Consolidated Interim Statements of Changes in Equity | 3 | | Condensed Consolidated Interim Statements of Cash Flows | 4 | | Notes to the Condensed Consolidated Interim Financial Statements | 5 – 30 | ORGANIGRAM HOLDINGS INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION As at February 28, ...

TABLE OF CONTENTS | Condensed Consolidated Interim Statements of Financial Position | | 1 | | --- | --- | --- | | Condensed Consolidated Interim Statements of Operations and Comprehensive Loss | | 2 | | Condensed Consolidated Interim Statements of Changes in Equity | | 3 | | Condensed Consolidated Interim Statements of Cash Flows | | 4 | | Notes to the Condensed Consolidated Interim Financial Statements | 5 – | 26 | ORGANIGRAM HOLDINGS INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION As ...

Financial Data and Key Metrics Changes - The first quarter of fiscal 2022 achieved record net revenue of $30.4 million, a 57% increase compared to Q1 fiscal 2021 [9][25] - Gross revenue grew 75% year-over-year to $44.3 million, primarily driven by higher recreational net revenue [25] - Cost of sales increased only 21% year-over-year to $28 million, leading to an improved gross margin of $610,000 compared to a loss of $16.7 million in Q1 2021 [27][25] - The adjusted EBITDA loss was reduced from $5.7 million in Q1 2021 to $1.9 million in Q1 2022, with a net loss decreasing from $34.3 million to $1.3 million [28][29] Business Line Data and Key Metrics Changes - The SHRED brand continued to be the most popular flower brand, with significant sales growth and market share increase [10][11] - SHRED'ems gummies ranked number three in sales and volume of units sold shortly after their introduction [12] - The Edison brand maintained strong market share, with new high potency strains launched to meet consumer demand [15] Market Data and Key Metrics Changes - OrganiGram held a 7.5% market share in the Canadian recreational market, up from 4.4% a year ago [9] - Market share increased to 7.6% in December, with the company holding the number one position in the flower category and moving up in gummies and pre-rolls [13] - The legal market now accounts for 53% of sales compared to 47% for the illicit market, indicating a shift in consumer preference [100] Company Strategy and Development Direction - The company completed an acquisition of Laurentian, enhancing its product portfolio and geographic presence in Quebec [8][24] - Investment in Hyasynth Biologicals was increased to $10 million, aiming to leverage biosynthesis for cannabinoid production [20][21] - The company plans to expand its capacity to 75,000 kilograms annually, which is expected to improve margins and meet growing demand [44][81] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving positive adjusted EBITDA by Q3 of fiscal 2022, supported by the Laurentian acquisition [29] - The company is cautious about Q2 due to seasonal factors and potential COVID-related restrictions impacting retail operations [66] - Management noted sustained demand for the SHRED brand and the importance of expanding distribution to meet consumer needs [49] Other Important Information - The company harvested approximately 11,600 kilograms of flower in Q1 2022, a 197% increase from the prior year [26] - The acquisition of Laurentian is expected to add $17 million in annual net revenue and $6 million in EBITDA [24] - The company is exploring international expansion opportunities, including potential markets in Europe and Australia [102] Q&A Session Summary Question: What drove the significant increase in market share? - Management attributed the growth to increased consumer interest in the SHRED brand and successful product launches in the gummies category [37][38] Question: What is unique about the Laurentian Organics acquisition? - Laurentian focuses on premium hash products with strong margins, which has driven consumer appreciation [39][40] Question: What is the outlook for Q2 sales? - Management indicated that Q2 is typically the lowest quarter due to seasonal factors, but expects significant year-over-year growth [64][66] Question: How does the company view pricing pressure in the market? - Management noted that while there has been price compression in the flower category, they have maintained pricing on SHRED due to strong demand [59][60] Question: What is the company's strategy for the U.S. market? - The company is monitoring U.S. market developments and will explore opportunities when the timing is right, focusing on CBD offerings and other adjacencies [107]