Mr. Norton Singhavon reports

AVANT BRANDS REPORTS Q2 2026 RESULTS HIGHLIGHTED BY 34% GROWTH IN RECREATIONAL REVENUE

Avant Brands Inc. today released its financial results for the second quarter ended May 31, 2026 (fiscal Q2 2026).

With an expanding global footprint, Avant has established itself as a leading Canadian producer of ultrapremium cannabis, delivering brands at a commercial volume that continues to be outpaced by market demand.

Norton Singhavon, founder and chief executive officer of Avant Brands, commented:

"Our Q2 results highlight the momentum of our recreational portfolio, with 34-per-cent year-to-date growth and top market share positions for BLK MKT and Tenzo in Ontario. While production was temporarily impacted by staggered room closures for strategic infrastructure upgrades at our Flowr facility, this investment was essential to meet consumer demand and expand our future capabilities. Just as importantly, we utilized our strong cash flow to continue aggressively deleveraging the company. In under 24 months, we have eliminated nearly 90 per cent of our total outstanding debt, reducing $8.1-million in total interest-bearing debt (from Q3 2024), to $1.03-million as at date of this news release. Avant is now leaner and well positioned for its next phase of profitable, sustainable growth."

Q2 2026 financial highlights (versus Q2 2025):

Revenue:

• Gross revenue: $9.2-million (negative 5 per cent);
• Net revenue: $7.8-million (negative 8 per cent);
• Recreational revenue: $3.8-million (plus 31 per cent);
• Export wholesale revenue: $2.9-million (negative 29 per cent);
• Domestic wholesale revenue: $1.1-million (negative 16 per cent).

Gross profit: Gross profit increased to $200,000, compared with a gross loss of $200,000 in Q2 2025.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): Adjusted EBITDA was negative $1.2-million, compared with positive $1.2-million in Q2 2025. The decrease was primarily driven by lower net revenue resulting from the staggered room closures for infrastructure upgrades at The Flowr Group Okanagan (Flowr), combined with the timing of the Health Canada annual regulatory fee, which was fully recognized in the second quarter rather than accrued evenly over the year.

Balance sheet and liquidity highlights

• Strong cash growth: The company's cash balance increased significantly to $3.3-million as of May 31, 2026, compared with $1.5-million at the end of fiscal 2025.
• Positive operating cash flow: Avant generated $1.7-million in net cash flows from operating activities for the six-month period ended May 31, 2026, demonstrating sustained cash-generation capability despite the lower top-line revenue and gross margins during the quarter.
• Non-dilutive funding inflow: Capital resources were further bolstered by $1.8-million in cash proceeds received from a government grant program, which directly financed the facility-wide LED lighting cultivation upgrade project at the Flowr facility.
• Active debt reduction: The company utilized its strong capital position to deploy $1.8-million toward financing activities during the period, continuing to rapidly deleverage its balance sheet. In less than 24 months, Avant has successfully reduced its total outstanding interest-bearing debt from approximately $8.1-million down to just $1.03-million as of the date of this news release. The remaining $1.03-million balance comprises $747,000 on the unsecured convertible debenture B and $287,000 on the secured credit facility.

Canadian recreational highlights:

Recreational revenue increased by 31 per cent, driven by focus on top-performing, high-velocity SKUs (stock-keeping units) and strong market share performance in Ontario, Canada's largest provincial market. The company continues to optimize its SKU portfolio and channel mix by identifying market white space and scaling products with strong consumer pull, supporting sustainable, long-term revenue growth. This targeted strategy yielded the following market milestones based on Q2 Ontario Cannabis Store (OCS) sales data:

• Premium whole flower leadership: BLK MKT leads Ontario's premium flower category ($8.60/gram and above), ranking as the No. 1 brand by total sales dollars during the quarter and outperforming more than 60 competing brands in the segment.
• Preroll category leadership: BLK MKT continued to hold the No. 1 position in overall sales within the single unit preroll segment above one gram.
• Fourteen-gram whole flower leader in sales: Tenzo Big Smallz ranked as the No. 2 best-selling 14-gram whole flower SKU in Ontario by total sales dollars during the quarter, outperforming more than 175 competing SKUs in the category.
• Leading milled offerings: Tenzo maintained its momentum in the milled category, securing the position as the No. 1 best-selling multipack milled product with its Fun Trip offering.

Cannabis Production and sales:

• Cannabis production: 2,850 kilograms (negative 14 per cent). The temporary decrease in production was primarily due to scheduled, strategic downtime at Flowr, the company's largest facility. During this period, Avant implemented a significant capital improvement program, nearing $2-million in total expenditure. The capital program converted the entire facility to lighting with increased efficiency, designed to reduce electrical demand, significantly increase facility capacity per square foot and further elevate the company's ultrapremium product quality.
• Cannabis sales: A total of 4,576 kg sold (64 per cent) with 1,605 kg comprised of trim.

Q2 2026 YTD (year-to-trade) financial highlights (vs. Q2 2025 YTD)

Revenue:

• Gross revenue: $17.5-million (negative 10 per cent);
• Net revenue: $14.9-million (negative 13 per cent);
• Recreational revenue: $7.6-million (plus 34 per cent);
• Export wholesale revenue: $4.4-million (negative 49 per cent);
• Domestic wholesale revenue: $2.7-million (plus 21 per cent).

Gross profit: Gross profit decreased to $300,000, compared with a gross profit of $1.4-million in YTD Q2 2025. The decrease in gross profit was driven by lower net revenue and a decrease in the unrealized gain on changes in fair value of biological assets as compared with the same period in the prior year.

Adjusted EBITDA: Adjusted EBITDA was negative $1.9-million, compared with positive $2.9-million in YTD Q2 2025. The decrease was primarily driven by lower net revenue resulting from the staggered room closures for infrastructure upgrades at the Flowr facility, combined with the timing of the Health Canada annual regulatory fee, which was fully recognized in the second quarter rather than accrued evenly over the year.

Cannabis production and sales:

• Cannabis production: 5,856 kg (negative 12 per cent). The temporary decrease in production was primarily due to scheduled, strategic downtime at Flowr, the company's largest facility. During this period, Avant implemented a significant capital improvement program, nearing $2-million in total expenditure. The capital program converted the entire facility to lighting with increased efficiency, designed to reduce electrical demand, significantly increase facility capacity per square foot and further elevate the company's ultrapremium product quality.
• Cannabis sales: 6,933 kg sold (plus 13 per cent). The year-over-year increase is primarily attributable to aged inventory sold.

About Avant Brands Inc.

Avant Brands is a leading innovator in premium cannabis products, driven by a commitment to exceptional quality and craftsmanship. As one of Canada's largest indoor producers, the company operates multiple production facilities across the country, cultivating unique and high-quality cannabis strains.

Avant offers a diverse product portfolio catering to recreational, medical and export markets. Its renowned consumer brands, including BLK MKT, Tenzo, Cognoscente, flowr and Treehugger, are available in key recreational markets across Canada. The company's international footprint spans Australia, Israel, Germany and the United Kingdom, with its flagship brand BLK MKT leading the way. Avant also serves qualified medical patients nationwide through its Avant medical cannabis brand, accessible via the Avant Medical portal and trusted partner network.

Avant is a publicly traded company, listed on the Toronto Stock Exchange (TSX) and accessible to international investors through the OTCQX Best Market (OTCQX) and Frankfurt Stock Exchange (FRA). Headquartered in Kelowna, B.C., the company operates in strategic locations throughout Canada.

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