Elixinol Wellness Annual Report 2021

The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the ‘Group’ or ‘Elixinol Wellness’) consisting of Elixinol Wellness Limited (referred to hereafter as the ‘Company’ or ‘parent entity’) and the entities it controlled at the end of, or during, the year ended 31 December 2021. DIRECTORS The following persons were directors of Elixinol Wellness Limited during the whole of the financial year and up to the date of this report, unless otherwise stated: Helen Wiseman Non-Executive Director and Chair Paul Benhaim Non-Executive Director Oliver Horn Executive Director and Global Chief Executive Ocer PRINCIPAL ACTIVITIES The principal activities of the Company during the year relate to its operation as a holding company for each of Elixinol LLC (‘Elixinol Americas’), Elixinol Wellness (Byron Bay) Pty Ltd trading as Hemp Foods Australia (‘Hemp Foods Australia’) and Elixinol BV and Elixinol Limited (together ‘Elixinol Europe’). The principal activities of the Group are: Elixinol Americas (hemp derived cannabidiol (‘CBD’) dietary supplements and topicals) Elixinol Americas is based in Colorado USA, and was established in 2014 to specialise in the manufacturing and distribution of products made from premium quality, predominantly ‘whole plant’ full spectrumCBD, which is extracted from organically grown industrial hemp. Hemp Foods Australia (hemp derived foods and skincare products) Hemp Foods Australia is based in Byron Bay Shire, New South Wales, Australia, and was founded in 1999 to manufacture, market and distribute hemp derived food, supplements and skincare products. Hemp Foods Australia distributes mainly within Australia but also supplies to export markets. Elixinol Europe (hemp derived cannabidiol (‘CBD’) food and cosmetics) Elixinol Europe is based in Utrecht, The Netherlands, and London, United Kingdom, and was established in 2018 to specialise in the development, sourcing, marketing and distribution of hemp derived CBD products including skincare. DIVIDENDS There were no dividends paid, recommended or declared during the current or previous financial year. REVIEWOF OPERATIONS Operating and Financial Review The loss for the Group after providing for income tax and non-controlling interest amounted to $17,025,000 (31 December 2020: $104,478,000 loss). The Group’s revenues from continuing operations for the year ended 31 December 2021 were $9,338,000 (31 December 2020: $15,010,000). The Group’s earnings before interest, tax, depreciation and amortisation (‘EBITDA’) from continuing operations, including share of associates’ net loss and excluding impairments and share-based payments, for the year ended 31 December 2021 was an Adjusted EBITDA loss of $11,496,000 (31 December 2020: Adjusted EBITDA loss of $23,223,000). EBITDA and Adjusted EBITDA are financial measures which are not prescribed by Australian Accounting Standards (‘AAS’) and represents the statutory result under AAS adjusted for certain items. The directors consider EBITDA and Adjusted EBITDA reflect the core earnings of the Group. Directors’ Report F INANCI AL REPORT 12 Elixinol Wellness Limited | Annual Report 2021