Mr. Bernie Yeung reports

ATLAS GLOBAL BRANDS ANNOUNCES FILING OF SECOND QUARTER 2023 INTERIM FINANCIAL STATEMENTS, FILING OF RESTATED FIRST QUARTER 2023 INTERIM FINANCIAL STATEMENTS

Atlas Global Brands Inc. has filed its unaudited interim condensed consolidated financial statements and related management's discussion and analysis and certifications for the three and six months ended Sept. 30, 2023 (the second interim filings).

In completing the second interim filings, the company became aware of an overstatement of inventory and understatement of cost of goods sold in its unaudited consolidated interim financial statements for the three and six months ended June 30, 2023, and related management discussion and analysis thereon filed on April 26, 2024 (the original Q1 interim financials), and determined that, as a result, it was necessary to restate those financial statements and related management discussion and analysis (the A&R interim financials).

As compared with the original Q1 interim financials, the A&R interim financials contain a reduction in the recorded inventory value of $1,635,493 and a corresponding increase in cost of goods sold.

"The completion of the second interim filings is another major step towards rectifying the company's continuous disclosure deficiencies and completing its outstanding continuous disclosure obligations, despite the reporting challenges from the company's operations in Israel. However, in the process of finalizing the second interim filings, it has come to the company's attention that an error in our previously issued interim financial statements, the original Q1 interim financials, necessitates a refiling. This decision underscores our commitment to transparency. The filing of the A&R interim financials now provides a more accurate representation of the company's financial position and performance, ensuring that investors, and other stakeholders can rely on the integrity of our disclosures," commented Bernie Yeung, chief executive officer of Atlas Global.

Copies of the documents comprising the second interim filings and A&R interim financials are available under the company's profile on SEDAR+.

Failure-to-file cease trade order update

As more particularly set out in the news release filed on Aug. 9, 2023, on Aug. 8, 2023, the Ontario Securities Commission (the OSC), the company's principal regulator, issued a failure-to-file cease trade order (the FFCTO), following the company's failure to file its audited annual consolidated financial statements and related management's discussion and analysis and certifications for the financial year ended March 31, 2023. Since the FFCTO, the company had also failed to file the interim financial statements, related management's discussion and analysis, and certifications, for the three months ended June 30, 2023, Sept. 30, 2023, and Dec. 31, 2023.

The required annual filings were filed on April 9, 2024, and with the filing of the A&R interim financials and the second interim filings completed on May 8, 2024, the company will focus its efforts on completing the final required interim filing and ultimately applying for a full revocation of the FFCTO.

Corporate update

Commencing in March, 2024, the Canada Revenue Agency (the CRA) issued requirements to pay (each an RTP) to various provincial wholesalers, for non-payment of excise taxes by the company, requiring the account debtors to pay the CRA 50 per cent of the amounts owing to the company. As a result, the company has been provided notice that it is in material breach of a receivables purchase agreement pursuant to which two of its wholly owned licensed producers sold eligible accounts receivable owing from provincial wholesalers. The company is in discussions with the purchaser of the receivables regarding the matter.

On April 22, 2024, Ernst & Young Inc., as receiver and manager of Atlas Biotech and Atlas Growers Ltd., respectively (together, the Atlas subsidiaries), filed a statement of claim in the Court of King's Bench against GreenSeal Cannabis Company Ltd. for a judgment in the amount of $351,712.50, interest and costs for cannabis products allegedly purchased by GreenSeal from the Atlas subsidiaries. GreenSeal is assessing the merits of the claim.

About Atlas Global Brands Inc.

Atlas Global is a global cannabis company operating in Canada and Israel with expertise across the cannabis value chain, including cultivation, manufacturing, marketing and distribution. Atlas Global currently distributes to eight countries: Australia, Canada, Denmark, Germany, Israel, Norway, Spain and the United Kingdom. In addition to a differentiated product mix, Atlas Global operates two licensed cannabis facilities, one of which has European Union good manufacturing practices, and three medical pharmacies in Israel.

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