Quarterly Activities/Appendix 4C Cash Flow Report

• Cash receipts from operating activities of $3.33m, up 9% on prior quarter
• Cash payments for operating activities of $5.65m, an improvement of 10% and 36% on prior quarter and prior corresponding period
• Net cash outflows from operating activities of $3.55m, an improvement of 34% and 31% on prior quarter and prior corresponding period

Cann Group Limited (ASX: CAN) has released its Quarterly Activities Report and Appendix 4C for the quarter ended 30 September 2024. The company reported cash receipts from operating activities of $3.33m, up 9% on the prior quarter but down 20% on the prior corresponding period. Cash payments for operating activities were $5.65m, an improvement (reduction) of 10% and 36% on the prior quarter and prior corresponding period respectively. Net cash outflows from operating activities were $3.55m, an improvement of 34% and 31% on the prior quarter and prior corresponding period respectively. The company produced just over 1 tonne of dried flower this quarter, up 90% from the prior quarter, and is on track to meet its targeted production of 5.5 tonnes for FY2025. Cann continues to improve its net operating cash outflows and has several funding options available, including a non-renounceable entitlement offer to raise up to $6.25 million. The company expects to report a cash flow neutral net operating cashflow result (excluding interest) in the next quarter, with a ramp-up in sales expected.

The company expects to report a cash flow neutral net operating cashflow result (excluding interest) in the next quarter, given the receipt of the R&D Refund. The company is firmly focused on scaling up production in the two commissioned zones of its Mildura facility to ~5.5 tonne per annum (initially), then 10 tonne per annum, and has the option to expand its current facility (subject to funding) by fitting out additional zones to further accelerate future revenue growth and profitability.

Next quarter (Q2), the company expects to see a ramp-up in its sales given it has had steady production at forecast levels for the past few months. The company will need additional short-term capital to execute on its production plan, and has several funding options available to it, with the recently launched non-renounceable entitlement offer being the preferred option.