Matt Koranda, (949) 720-7119 [email protected] Gustavo Gala, (949) 720-7116 [email protected] Sales (800) 933-6830, Trading (800) 933-6820

COMPANY NOTE | EQUITY RESEARCH | February 16, 2021

Consumer: DTC & Disruptors Initiation of Coverage Kits Eyecare Ltd. | KITS.TO - C$8.13 - TSX | Buy

Stock Data 52-Week Low - High C$7.55 - C$10.20 KITS: Good Growth, Solid Unit Economics, Shares Out. (mil) 31.00 Aligned Management; Initiate at Buy Mkt. Cap.(mil) C$252.03 3-Mo. Avg. Vol. NA With its digital-first approach to selling contacts and prescription glasses/ 12-Mo.Price Target C$13.00 sunglasses, we see a long runway of growth ahead as Kits capitalizes on a Cash (mil) C$43.2 steady shift of the USD $35bn North American eyewear market into online Tot. Debt (mil) C$11.0 channels (only 13% sold online in 2021, under-penetrated vs. most consumer Revenue (C$ millions) categories). We like Kits' dual-pronged strategy of converting customers into high-visibility auto-ship programs while driving glasses growth, as these Yr Dec —2020— —2021E— —2022E— improve customer-level profitability. Moreover, management has a track- Curr Curr 1Q NA 22.5E 32.4E record of success and owns ~70% of shares. 2Q NA 32.1E 45.3E ■ 3Q 20.2A 31.8E 44.9E We initiate coverage on Kits Eyecare at Buy with a $13 PT. Kits 4Q 19.6A 30.6E 41.2E offers vision testing, prescription renewals, and products such as contact YEAR 74.5A 116.9E 163.9E lenses and eyeglasses through its website, kits.com. Roughly 80%/20% of sales come from the U.S./Canada. Since mid-2020, Kits has been focused EBITDA on converting existing customers into auto-ship subscription programs Yr Dec —2020— —2021E— —2022E— for contact lenses. The company is also building in-house production Curr Curr capabilities for glasses (especially lenses), with the capacity to produce ~2k 1Q NA (2.7)E (1.3)E pairs of glasses each day. Kits completed its IPO on the TSX in Jan'20 at 2Q NA (1.6)E 2.1E $8.50/share, raising net proceeds of ~$52mn. 3Q 1.7A (1.6)E 1.5E ■ (1) We believe Kits has a long runway of 4Q (1.9)A (1.7)E 0.7E Our Buy rating is based on: YEAR 2.9A (7.6)E 3.0E growth ahead, as the company offers an innovative, digital-first approach in a USD $35bn TAM that is rapidly moving online (13% online in 2020, EPS C$ +400bps YoY). (2) Our unit-level analysis suggests Kits can grow sustainably Yr Dec —2020— —2021E— —2022E— while generating healthy levels of profitability. (3) Kits is well-capitalized after Curr Curr its recent IPO, maintaining a ~$43mn cash war chest (post debt pay down 1Q NA (0.09)E (0.05)E of $8.5mn) that provides a multi-year runway for growth and reinvestment. 2Q NA (0.05)E 0.02E (4) We like management's high ownership, at ~70% of shares outstanding. 3Q (0.01)A (0.05)E 0.01E We also like CEO/co-founder Roger Hardy's track record of success in 4Q (0.08)A (0.06)E (0.01)E the eyewear industry (having sold his prior business, Coastal Contacts, to YEAR (0.10)A (0.24)E (0.02)E Essilor, in a successful exit in 2014). ■ We forecast an attractive +41% revenue CAGR (2020-2023); adj EBITDA KITS.TO One-Year Price and Volume History 2.5 11.00 should improve materially after a period of investment in growth in 2021/2022. We expect Kits to spend aggressively to acquire customers and 2.0 10.00 convert new/existing consumers into its glasses and auto-ship programs in 1.5 9.00 2021. This will likely result in a period of EBITDA de-leverage in 2021: we 1.0 8.00 forecast ($7.6mn) adj EBITDA, or (6.5%) margins. Thereafter, in 2022 and 0.5 7.00 beyond, we see operating leverage kicking-in, significant margin expansion 0.0 6.00 in 2022 an 2023 (+800bps and +500bps, respectively). Vol (m) Price ■ Our $13 price target applies a 2.5x multiple to our 2022 sales estimate.

Feb-21 DTC and digitally-native (non-healthcare) peers trade for a median 3.0x 2021 sales estimates, while eye care and DTC/digital healthcare peers trade for a median 8.0x 2021 sales. We assign a slightly below-peer median 2.5x EV/sales multiple to our 2022 revenue estimate of $164mn. As Kits proves out its higher-revenue visibility auto-ship program and demonstrates improving GM performance into 2022, we expect to assign a higher multiple.

Important Disclosures & Regulation AC Certification(s) are located on page 31 to 34 of this report. Roth Capital Partners, LLC | 888 San Clemente Drive | Newport Beach CA 92660 | 949 720 5700 | Member FINRA/SIPC KITS EYECARE LTD. Company Note - February 16, 2021

INVESTMENT OVERVIEW

Kits Eyecare Ltd. (TSX: KITS.TO – Buy) is a digital eye care platform. Kits offers vision testing, prescription renewals, and products such as contact lenses and eyeglasses through its website, kits.com. Roughly 80% of sales are generated in the United States, while the remaining 20% are from Canada. Kits carries ~40,000 SKUs of contacts and glasses, sourced from third-party brands as well as a Kits private label brand. Kits has served over 600k customers since inception and currently enjoys a 69% repeat order rate. Since mid- 2020, Kits has been focused on converting existing customers into auto-ship subscription programs for contact lenses. The company is also building its in-house production capabilities for glasses, with the capacity to produce ~2k pairs of glasses each day (in-house lens edging/surfacing). Kits completed its IPO on the TSX in January 2020 at $8.50/share.

Our Buy rating on KITS is based on the following. (1) We believe Kits has a long runway of growth ahead, as the North American eyewear market is large, representing USD ~$35bn in annual retail in 2020, with relatively low rates of digital penetration (~13% in 2020, up from 9% in 2019). The introduction of Kits’ new glasses product line, as well as an auto-ship subscription-like program, should both drive outsize growth and margin expansion during our forecast period. (2) Our unit economics analysis suggests Kits can grow sustainably while generating healthy levels of operating profit as the business scales. (3) Kits is well-capitalized after its recent IPO (~$50mn), providing multiple years of runway as management works to expand key business lines like its auto-ship program as well as glasses. (4) We believe high insider ownership aligns management with shareholders. Moreover, we like co-founder Roger Hardy’s demonstrated track record of success in the eyewear market.

We forecast 2021/2022 revenue of $117mn/$164mn (+57%/+40% YoY growth) and adj EBITDA of $(7.6)mn/$3.0mn ((6.5%)/+1.8% margins). Our 2021 revenue growth forecast of +57% YoY assumes contacts revenue growth of +48% YoY, while we anticipate a significant ramp in the glasses category of +305% YoY (off a low revenue base of <$3mn in 2020). Importantly, we expect GMs to erode in 2021 (down (440)bps YoY) as Kits offers discounts to accelerate growth in two strategically important product lines: (a) auto-ship and (b) glasses. We also expect a ramp-up in operating expenses, especially fulfillment ($12.6mn or 10.8% of sales, up from $7.6mn or 10.2% in 2020) and marketing ($18.0mn or 15.4% of sales, up from $8.1mn or 10.9% of sales in 2020). These assumptions drive significant adj EBITDA margin de-leverage ((6.5)% margin, down ~1,140bps YoY). In 2022, we forecast sustained strong revenue growth of +40% YoY, supported by +32% YoY growth in contacts and +121% YoY growth in glasses. We expect improved 2022 operating leverage as product discounting should abate, and higher sales should absorb the 2021 step-up in opex (opex 27.9% of sales, down (420)bps YoY). This drives our 2021 adj EBITDA of $3.0mn (1.8% margin, up +830bps YoY).

Page 2 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Exhibit 1: We expect sales to grow at a 41 % three -year CAGR , Exhibit 2: We expect near -term EBITDA margin pressure as Kits with the most robust YoY growth in 2021/2022. invests in new product lines and customer acquisition.

KITS Revenue (2018-2023E) KITS Adj. EBITDA (2018-2023E) 56.9% 60.0% 20.0 20.0% 210.1

200.0 49.2% 50.0% 15.0 14.1% 14.2 15.0%

163.9

150.0 40.2% 40.0% 10.0 8.7% 10.0%

6.7 116.9 6.7% 28.2% 30.0% 5.0 4.3 5.0% 3.0 100.0 3.9% YoY Growth YoY Growth YoY Revenue ($mn) Revenue ($mn) Revenue 2.9 1.8% 74.5 20.0% 0.0 0.0%

47.6 49.9 50.0 10.0% (5.0) -5.0% -6.5% 10.9% 4.9% (7.6) 0.0 0.0% (10.0) -10.0% 2018 2019 2020E 2021E 2022E 2023E 2018 2019 2020E 2021E 2022E 2023E Revenue (LHS) YoY growth (RHS) Adj EBITDA (LHS) EBITDA Margin (RHS) Source: KITS SEDAR Filings & ROTH Capital Partners Estimates. Source: KITS SEDAR Filings & ROTH Capital Partners Estimates.

We view key risks as: (1) a crowded competitive landscape within eyewear (both digital peers and larger incumbents); (2) Kits may face challenges in converting customers into auto-ship arrangements (limited success in conversion, high discounting, etc.); and (3) cash burn could grow in the near-term as the company invests in customer acquisition and building customer lifetime value through auto-ship and glasses programs.

Our $13 price target applies a 2.5x multiple to our 2022 sales estimate. DTC and digitally-native (non-healthcare) peers trade for a median 2.8x 2021 sales estimates, while eye care and DTC/digital healthcare peers trade for a median 8.0x 2021 sales. We believe Kits is in an earlier stage of its growth relative to most of these peers, and expect the company will likely go through an investment cycle in both opex/capex during 2021/2022. As such, we assign a slightly below-peer median 2.5x EV/sales multiple while looking further out, to our 2022 revenue estimate of $164mn. As Kits proves out its higher-revenue visibility auto- ship program and demonstrates improving GM performance into 2022, we expect to assign a higher multiple.

Page 3 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

INVESTMENT THESIS

(1) We believe Kits has a long runway of growth ahead, as the North American eyewear market is large, representing USD ~$35bn in annual retail in 2020, with relatively low rates of digital penetration (~13% in 2020, up from 9% in 2019). We note glasses and auto-ship programs will be key to Kits’ growth while also driving margin expansion (especially glasses).

The North American eyewear TAM is large and stable, representing USD ~$35bn of retail value in 2020 (long-term CAGR of 2.5% from 2008-2019). In 2020, we expect Kits revenue of $74mn, representing ~0.2% of the total North American TAM. Given Kits has primarily been an online contact lens provider to date, a more reasonable calculation of Kits’ overall share suggests a 1.0% penetration in the overall contacts category, or a 1.3% penetration in the online portion of the market (See Exhibit 5).

Exhibit 3: The North American eyewear market by channel. Exhibit 4: The North American eyewear market by product.

Eyewear TAM Sales by Channel - North America (2020E) Eyewear TAM Sales by Product Category - North America (2020E) Total Addressable Market: $35,200mn Total Addressable Market: $35,200mn

Other 4.0% Sunglasses 11.9% E-commerce 13.0% Pharmacies and drug stores 3.0%

Contact lenses 20.5% Grocery retailers 14.0% Optical shops 54.0%

Eyeglasses 67.6%

Mixed retailers 12.0%

Source: KITS SEDAR filings; Euromonitor International. Source: KITS SEDAR filings; Euromonitor International.

Making reasonable assumptions about digital penetration, we believe Kits’ online eyewear category is likely growing at a high-teens/low 20% CAGR during our forecast period. We expect Kits will benefit from this overall category growth, while also investing in customer acquisition and expanding product lines (glasses) and services (auto-ship) to take share, supporting our +43% revenue CAGR (2019-2023). In the Exhibits below, we highlight Kits’ share of the digital eyewear market in 2020 and our estimate for 2023. We assume the digital eyewear market grows to ~17% of the $39.9bn TAM (Euromonitor forecasts overall TAM, we make 17% assumption). By 2023, we estimate Kits market share at <3% of the digital eyewear segment, leaving ample room for sustained long-term growth.

Page 4 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Exhibit 5: Kits share of total digital eyewear market 2020. Exhibit 6: Kits share of total digital eyewear market 2023.

KITS Market Share, 2020E TAM ($USD) KITS Market Share, 2023E TAM ($USD) Total Addressable Market: $4,500mn Total Addressable Market: $6,800mn

KITS, % of TAM, 1.3% KITS, % of TAM, 2.4%

TAM, non-KITS, 98.7% TAM, non-KITS, 97.6%

Source: KITS SEDAR filings. Source: KITS SEDAR filings.

We see two key growth drivers in our forecast period: (a) glasses and (b) auto-ship.

(a) Glasses ($35mn in 2023 revenue, 136% CAGR from 2020-2023). Kits introduced glasses during 2020 and has sold >20k pairs through 3Q20. We expect glasses to comprise <$3mn in 2020 revenue, or ~3.5% of the total revenue mix. Given management’s long-term target for glasses stands at ~30% of total revenue, we forecast a rapid ramp in glasses revenue in 2021 (+305% YoY to $11mn), followed by steady but still strong growth in 2022/2023 (+121%/+47% YoY to $24mn/$35mn). By 2023, we expect glasses will comprise ~17% of Kits’ total revenue.

Why is Kits introducing glasses to its online platform? First, the obvious benefit is that glasses help drive higher average order values (AOVs). We believe glasses are largely a complementary purchase for consumers purchasing contact lenses online, and believe the typical $69 CAD AUR glasses will likely add to the $143 current AOV, which is largely based on an end user buying multiple months of contact lenses. Please see Exhibits 7 and 8 for how this impacts unit economics positively. Second, glasses tend to have a higher margin than contacts because (1) Kits is emphasizing its private label offerings (see Exhibit 43 in the Company Overview Section for a comparison of Kits glasses vs. competitor private label and branded offerings), and (2) Kits is building low- cost, internal lens edging/surfacing capabilities that should contribute to the higher margins on its private label frames. We estimate a full-priced pair of glasses generates ~50-55% GMs for Kits, relative to contacts, which are likely in the 25-30% range, depending on SKU.

Why is Kits better-positioned to win in the glasses category vs. competitors in the eyewear industry? Simply put, Kits plans to win on convenience and price first, then expand its production capability to meet the demands of consumers with specialized prescriptions, which will likely differentiate the company from most incumbents in the eyewear industry. With a portion of the IPO proceeds, Kits is building out vertical lens surfacing and edging capacity that should give the company the ability to ship a pair of glasses either same-day or within one day of a consumer’s order. This compares with our checks on competitor websites like Eye Buy Direct (7-14 days), Warby Parker (7-10 days), Felix Gray (5-7 days), and LensCrafters (3-7 days).

(b) Auto ship program ($118mn in 2023 revenue, >300% CAGR from 2020-2023). Kits has been working to convert existing and new customers into its auto-ship program, which automatically ships a set of prescription contact lenses (customers can select the quantity of boxes they would like to buy) at a predetermined cadence (customers can select from 1/3/6/9/12 month intervals at checkout).

Page 5 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Why is Kits introducing auto-ship to its online platform? Customers that are purchasing contact lenses have incredibly long/high potential lifetime values, as, these consumers will likely purchase contact lenses for the duration of their normal adult lives (exceptions being if a customer receives laser vision correction or has a substantial change in eye health that causes them to discontinue wearing contact lenses). For example, a 30-year old consumer that wears Oasys Acuvue for Astigmatism 2-week contacts, would likely need to purchase 8 boxes per year at an ASP of $39/box for annual revenue of $312 (One box contains six contact lenses lasting about two weeks per lens. One box would last 12 weeks; 12 x 4 = ~48 weeks; let’s assume this adult pushes the envelope on lens use a bit beyond the 2-week recommended wear period; this means 8 boxes per year at $39/box = $312). An NPV calculation on 30-years of lifetime contact use (using the 30-year treasury as the risk free rate, which is 2%, and inflation/upward price adjustments of +2%/year) suggests this customer has a >$9,000 potential lifetime value (in revenue terms). While this illustration highlights the high potential lifetime customer value that a contact lens customer may have, we believe most retailers and online platforms have historically taken a highly-transactional approach to selling contact lenses. Changing the nature of this sale into a more-subscription-based purchase is exactly the type of high-lifetime value strategy that Kits should be pursuing, in our view. Auto-ship provides Kits with better revenue visibility and improves customer retention relative to a more traditional transactional approach to selling contacts online. By converting a customer into auto-ship, we believe Kits will likely be more effective at targeting customers for re-purchase as their auto-ship program expires (and as they need refreshed eye exams to qualify for renewed prescriptions). This should lower retention marketing costs and boost customer lifetime values over time.

Why is Kits better positioned to win at auto-ship vs. eyewear competitors? We believe Kits is offering competitive pricing on most of its contacts, which puts it at parity with online competitors like DiscountContactLenses.com and 1-800 Contacts. Moreover, as Kits ramps its glasses offering, we believe being more of a one-stop shop may help Kits compete effectively for customers. We acknowledge that auto-ship represents both an opportunity and a threat for Kits, as larger competitors like EssilorLuxottica (LensCrafters parent) could begin to offer more auto-ship/auto-renewal options to consumers after they complete certain regular eye exams or shop for glasses in physical stores. This is why we believe in the near-term, Kits will likely be aggressive in rolling out its auto-ship program, converting as many customers as possible in the near-term, as it will be easier to defend these existing customers than to try to win auto-ship customers away from larger incumbents over the next several years.

Page 6 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

(2) Our unit economics analysis suggests Kits can grow sustainably while generating healthy levels of operating profit as the business scales; however, we note management will need strong execution on its auto-ship and glasses programs to achieve attractive unit economics over the long-haul.

We believe a bottom-up unit economics analysis demonstrates that Kits is pursuing the right strategy in offering glasses and converting customers to auto-ship.

In Exhibit 7 below, we show that the transactional approach to selling contacts online is a challenged business model at best… Assuming a $143 AOV, GMs of 27%, a CAC of $40, and variable fulfillment costs at 7% of revenue, this results in negative contribution profit of ($11) on an initial transaction. We believe this business model is challenging, as it ultimately relies on inducing a customer to re-purchase to create a positive contribution margin (purchase number two, assuming the same unit economics, but no incremental CAC, would result in a cumulative positive contribution margin of ~$29).

…while offering glasses improves unit economics materially. By adding glasses to the transactional model (part B of Exhibit 7), this has the potential to boost AOVs to $212 (we assume $143 AOV is contacts only; we further assume a customer would add one-pair of $69 AUR glasses). With the higher gross margin glasses (GMs of 55%), this helps generate contribution profit of $21.50 in the first transaction. Unit economics improve materially if a customer makes a second purchase (purchase number two, again, assuming the same unit economics, but no incremental CAC, would result in a cumulative positive contribution margin of $83 (a 2x payback on $40 CAC or a ~20% contribution margin).

Exhibit 7: Current transactional unit economics (A) Unit economics on 1st purchase (transactional model) Units Notes Average order value 143.0 <--$143 AOV from KITS deck, slide 24 COGS 104.4 Gross profit 38.6 Marketing 40.0 <--CAC disclosed in KITS deck, slide 24 Fulfillment 10.0 Contribution profit (11.4) Margins GM 27% <--2020 ROTHe GM; also KITS deck, slide 24 Marketing 28% <--CAC over total AOV Fulfillment 7% <--2019 KITS fulfillment as % of sales; also KITS deck slide 24 Contribution margin -8%

Contribution profit/CAC -0.3x <--Uneconomic on 1st purchase

(B) Unit economics on 1st purchase (transactional model w/glasses) Units Notes Average order value 212.0 <--takes $143 contacts AOV and attaches 1 pair of $69 AUR glasses COGS 135.7 Gross profit 76.3 Marketing 40.0 <--CAC disclosed in KITS deck, slide 24 Fulfillment 14.8 Contribution profit 21.5

Margins GM 36% <--Assumes blended GM based on contacts GM 27%, glasses GM 55% Marketing 19% <--CAC over total AOV Fulfillment 7% <--2019 KITS fulfillment as % of sales; also KITS deck slide 24 Contribution margin 10%

Contribution profit/CAC 0.5x <--Transactional model becomes economic just by adding glasses Source: KITS SEDAR filings; KITS Company Presentation (Jan’21); ROTH Capital Partners estimates.

Page 7 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

We believe Exhibit 8 shows the power of a long-term, steady relationship with a customer that can come about from the Kits auto-ship program. In section A, we show the five-year cumulative revenue per user of $600. Assuming similar unit economics to the transactional model (contacts only) above, this results in $80 of contribution profit, a 2x payback on CAC, and a mid-teens contribution margin. In section B, if we assume a customer adds one-pair of $69 AUR glasses each year, this boosts cumulative revenue per user to $945, while also boosting GMs (recall glasses are >50% GM). This substantially boosts customer lifetime value to >$240, and suggests a mid-20% contribution margin, which should translate to high operating profit margins as Kits scales.

Exhibit 8: Long term unit economics (A) Unit economics on LTV (auto-ship model) Units Notes Average revenue in cohort 600.0 <-- 2015 cohort ~$600 over 5-years, KITS deck, slide 11 COGS 438.0 Gross profit 162.0 Marketing 40.0 <--CAC disclosed in KITS deck, slide 24 Fulfillment 42.0 Contribution profit 80.0 Margins GM 27% <--2020 ROTHe GM; also KITS deck, slide 24 Marketing 7% <--CAC over 1-year cohort revenue Fulfillment 7% <--2019 KITS fulfillment as % of sales; also KITS deck slide 24 Contribution margin 13%

Contribution profit/CAC 2.0x <--Acceptable LTV/CAC with good contribution margin

(B) Unit economics on LTV (auto-ship model w/glasses) Units Notes Average revenue in cohort 945.0 <--takes 2015 5-year cohort and attaches 5-pair of $69 AUR glasses COGS 595.4 Gross profit 349.7 Marketing 40.0 <--CAC disclosed in presentation, slide Fulfillment 66.2 Contribution profit 243.5

Margins GM 37% <--Assumes blended GM based on contacts GM 27%, glasses GM 55% Marketing 4% <--CAC over total AOV Fulfillment 7% Contribution margin 26%

Contribution profit/CAC 6.1x <--Compelling LTV/CAC and CM suggest high EBITDA % achievable Source: KITS SEDAR filings; KITS Company Presentation (Jan’21); ROTH Capital Partners estimates.

Page 8 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

(3) Kits is well-capitalized after its recent IPO, with multiple years of runway as management works to expand key business lines like its auto-ship program as well as glasses.

After raising a net ~$52mn in cash from the recent IPO, we believe Kits is well- positioned to pursue its growth strategy during our forecast period. We expect a step- up in expenses in 2021 as Kits aggressively pursues customer acquisition in its glasses and auto-ship programs, while spending on building out its in-house lens capacity expansion. We believe this spending, combined with regularly scheduled debt paydown, will result in ~$20mn of cumulative cash burn in 2021/2022. By 2023, as Kits builds scale, reduces discounting, and leverages operating expense investments, we expect the business to generate FCF on a go-forward basis. Even with a period of cash burn ahead, Kits should remain in a net cash positive position during our forecast period (total debt stands at ~$12mn post IPO proceeds pay down of ~$8.5mn while cash balance post IPO is ~$43mn). We believe this provides management with flexibility to pursue value-accretive strategies like (1) accelerated customer acquisition and/or (2) bolt-on acquisitions.

Exhibit 9: We expect Kits will generate FCF beginning in 2023. KITS FCF (CFO - Capex) 20.0

15.0

10.0

6.7

5.0 3.2 1.3 0.0

Free Cash Flow($mn) Free Cash (1.8) (5.0)

(10.0) (10.9)

(15.0) 2019A 2020E 2021E 2022E 2023E Source: KITS SEDAR filings; ROTH Capital Partners estimates.

Page 9 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

(4) We believe high insider ownership should align management with shareholders. Moreover, we like co-founder Roger Hardy’s demonstrated track record of success in the eyewear market.

We like that the Kits leadership team owns ~70% of shares outstanding, which likely heavily aligns management with public shareholders. We believe key leaders have a material portion of their net worth in KITS stock. Co-founder and CEO Roger Hardy owns 9.1mn shares (~29% of shares outstanding; worth ~$77.6mn at the $8.50/share IPO price), CFO Sabrina Liak owns 3.9mn shares (~13% of shares outstanding; worth $33.5mn at $8.50/share), and legacy LD Vision owners Arshil Abdulla and Fayaz Abdulla own a collective 8.5mn shares (~27% of shares outstanding; worth $72.3mn at $8.50/share).

Exhibit 10: Management and BoD share ownership. Name Common Shares % of Total Shares Out Options (1) RSRs Directors and Executive Officers Roger Hardy 9,126,414 29.4% 345,000 9,706 Arshil Abdulla 4,801,765 15.5% 345,000 8,848 Sabrina Liak 3,940,256 12.7% 345,000 9,583 Joseph Thompson 205,542 0.7% 920,000 5,882 Nick Bozikis 17,050 0.1% 9,200 NA Fayaz Abdulla 3,734,706 12.0% NA NA Total Shares 21,825,733 70.4% Total Shares Outstanding 31,000,003 100.0% Total MGMT Ownership % 70.4% (1) Options strike at $2.70 CAD. Source: KITS SEDAR filings; ROTH Capital Partners estimates.

Page 10 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

PEER BENCHMARKING

We benchmarked KITS against a peer set comprised of (a) eye care and digital healthcare companies and (b) fast-growing direct-to-consumer brands with digitally- led approaches to selling. The eye care and digital healthcare peer set includes Conversion Labs (CVLB – NC), EssilorLuxottica (ESLX – NC), GoodRx (GDRX – NC), Hims & Hers (HIMS – NC), National Vision Holdings (EYE – NC), and Smile Direct Club (SDC – NC). The fast growing DTC brands include Blue Apron (APRN – NC), Chewy (CHWY – NC), Casper (CSPR – Buy), Etsy (ETSY – Buy), HelloFresh (HFG – NC), Lovesac (LOVE – Buy), Mohawk (MWK – Buy), Purple Innovation (PRPL – Buy), Revolve Group (RVLV – Buy), Wayfair (W – NC), and YETI (YETI – Neutral).

Exhibit 11: KITS grew faster than most eye care and digital Exhibit 12: KITS grew faster than most DTC (non-Healthcare) healthcare peers over the TTM period. peers over the TTM period.

KITS vs. DTC & Digital Models (Non-Healthcare) - TTM'3Q20 YoY Revenue Growth KITS vs. DTC & Digital Models (Non-Healthcare) - TTM'3Q20 YoY Revenue Growth

95.0% 91.1% 95.0%

85.0% 85.0%

75.0% 75.0% 66.3% 65.0% 65.0% 58.1% 55.0% 55.0% 50.3% 45.0% 45.0% 39.9% 39.9% 39.8% 38.3% 33.3% 35.0% 29.6% 35.0% 28.3% 26.8% 25.0% 25.0% Revenue Growth YoY Growth Revenue Revenue Growth YoY Revenue Growth 16.4% 15.0% 15.0% 10.6%

5.0% 5.0% 1.6%

-5.0% -0.2% -5.0% -6.9% -15.0% -8.5% -15.0% -14.9% -25.0% -25.0% CVLB HIMS (1) KITS GDRX (2) SDC EYE (3) ESLX HFGG (1) ETSY (1) KITS (1) MWK (1) PRPL (1) W (1) CHWY (2) LOVE (2) CSPR (1) YETI (3) RVLV (1) APRN (1)

(1) Represents management's estimates for TTM period ended 12/31/20. (1) Represents TTM period ended 9/30/20. (2) Represents nine month period ended 9/30/20 (2) Represents TTM period ended 11/1/20. (3) Represents TTM period ended 9/26/20. (3) Represents TTM period ended 9/26/20. Source: Company SEDAR/SEC filings; ROTH Capital Partners. Source: Company SEDAR/SEC filings; ROTH Capital Partners.

Exhibit 13: We expect KITS will grow revenue faster than the peer Exhibit 14: We expect KITS will grow revenue faster-than-peer median consensus growth forecasts for eye care and DTC median consensus growth forecasts for non-healthcare DTC healthcare peers through 2022. peers through 2022.

KITS and Peers - YoY Revenue Growth KITS and Peers - YoY Revenue Growth 65.0% 65.0% 56.9% 56.9% 55.6% 49.2% 49.2%

45.0% 40.2% 45.0% 41.4% 40.2% 47.2%

30.3% 35.1% 25.0% 24.7% 25.0% 20.7% 18.0% 18.8%

5.0% 10.9% 5.0% 10.9% 4.9% 4.9% -2.1% Revenue Growth YoY YoY Growth Revenue YoY Growth Revenue

-15.0% -15.0%

-35.0% -35.0%

-55.0% -55.0% FY18A FY19A FY20E FY21E FY22E FY18A FY19A FY20E FY21E FY22E KITS Peer median - Eyecare & Digital Healthcare KITS Peer median - DTC & Digital Models (Non-Healthcare) Source: Company SEDAR/SEC filings; Thompson Eikon; ROTHe. Source: Company SEDAR/SEC filings; Thompson Eikon; ROTHe.

Page 11 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Exhibit 15: KITS had lower gross margins than eye care and Exhibit 16: KITS had lower gross margins than DTC (non- digital healthcare peers over the TTM period. healthcare) peers over the TTM period.

KITS vs. Eyecare & Digital Healthcare - TTM'3Q20 Gross Margin KITS vs. DTC & Digital Models (non-HC) - TTM'3Q20 Gross Margin 100.0% 95.1% 100.0%

90.0% 90.0%

80.0% 80.0% 72.0% 71.0% 70.6% 68.4% 70.0% 70.0% 65.3%

60.0% 57.8% 60.0% 55.9% 53.1% 51.8% 50.7% 50.5% 50.0% 50.0% 47.1% 44.2% 38.4% Gross Margin Gross 40.0% Margin Gross 40.0% 30.5% 30.5% 30.0% 30.0% 24.5% 24.2% 20.0% 20.0%

10.0% 10.0%

0.0% 0.0% GDRX (1) CVLB (1) HIMS (2) SDC (1) ESLX (1) EYE (3) KITS (1) ETSY (1) HFGG (1) YETI (2) RVLV (1) LOVE (3) CSPR (1) PRPL (1) MWK (1) APRN (1) KITS (1) CHWY (3) W (1)

(1) Represents TTM period ended 9/30/20. (1) Represents TTM period ended 9/30/20. (2) Represents management's estimate for period ended 12/31/20. (2) Represnts TTM period ended 9/26/20. (3) Represents TTM period ended 9/26/20. (3) Represents TTM period ended 11/1/20. . . Source: Company SEDAR/SEC filings; ROTH Capital Partners. Source: Company SEDAR/SEC filings; ROTH Capital Partners.

Exhibit 17: We expect KITS gross margins will lag eye care digital Exhibit 18: We expect KITS gross margins will lag DTC (non- healthcare peers through our forecast period. Over a longer time healthcare) peers through our forecast period. Over a longer time horizon, KITS is targeting 35-40% GMs as it reaches scale and horizon, KITS 35-40% target would partially close the gap vs. the sells a higher mix of glasses at full price. DTC peer set.

KITS and Peers - Gross Margin KITS and Peers - Gross Margin 70.0% 60.0%

63.6% 63.3% 62.0% 61.2% 60.6% 50.9% 60.0% 50.3% 56.1% 50.0% 48.8% 46.1%

50.0% 41.7% 40.0% 37.4%

40.0%

30.0%

Gross Gross Margin 30.0% Gross Margin 27.4% 27.7% 27.4% 27.7% 27.4% 24.6% 27.4% 27.7% 27.4% 27.7% 27.4% 20.0% 24.6% 20.0%

10.0% 10.0%

0.0% 0.0% FY17A FY18A FY19A FY20E FY21E FY22E FY17A FY18A FY19A FY20E FY21E FY22E KITS Peer median - Eyecare & Digital Healthcare KITS Peer median - DTC & Digital Models (Non-Healthcare) Source: Company SEDAR/SEC filings; Thompson Eikon; ROTHe. Source: Company SEDAR/SEC filings; Thompson Eikon; ROTHe.

Page 12 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Exhibit 19: KITS spent less on SG&A (as a % of sales) than eye Exhibit 20: KITS spent less on SG&A (as a % of sales) than DTC care digital healthcare peers over the TTM period. (non-healthcare) peers over the TTM period.

KITS vs. Eyecare & Digital Healthcare - TTM'3Q20 SG&A as a % of Revenue KITS vs. DTC & Digital Models (non-HC)- TTM'3Q20 SG&A as a % of Revenue 180.0% 80.0%

157.0% 70.1% 160.0% 70.0%

140.0% 58.1% 60.0% 56.0% 120.0% 50.1% 50.0% 103.3% 100.0% 42.5% 42.1% 41.6% 40.0% 82.1% 35.1% 80.0% 70.5% 30.0% SG&A % of % Revenue SG&A of % Revenue SG&A 27.2% 26.5% 26.1% 60.0% 24.5% 43.2% 20.0% 40.0% 26.1% 10.0% 20.0% 13.2%

0.0% 0.0% CVLB (1) SDC (1) HIMS (2) GDRX (1) EYE (3) KITS (1) ESLX (1) CSPR (1) MWK (1) HFGG (1) LOVE (2) RVLV (1) APRN (1) YETI (3) PRPL (1) CHWY (2) ETSY (1) KITS (1) W (1)

(1) Represents TTM period ended 9/30/20. (1) Represents TTM period ended 9/30/20. (2) Represents SG&A as a % of sales over the nine month period ended 9/30/20. (2) Represents TTM period ended 11/1/20. (3) Represents TTM period ended 9/26/20. (3) Represents TTM period ended 9/26/20. Source: Company SEDAR/SEC filings; ROTH Capital Partners. Source: Company SEDAR/SEC filings; ROTH Capital Partners.

Exhibit 21: We expect KITS will spend less than eyecare/digital Exhibit 22: We expect KITS SG&A as a % of sales will be below healthcare peers through our forecast period. Over a longer time DTC (non-healthcare) peers through our forecast period. Beyond horizon we see KITS spending less on SG&A as a % of sales as the forecast period KITS will likely benefit from its operating the business scales. leverage.

KITS and Peers - SG&A as a % Revenue KITS and Peers - SG&A as a % Revenue 60.0% 50.0%

43.2% 42.1% 49.9% 49.6% 41.7% 50.0% 40.0% 44.7% 37.0% 43.6% 43.2% 42.3% 35.7% 35.4%

40.0% 30.0% 32.0%

27.3% 27.9% 30.0% 32.0%

27.3% 27.9% 20.0% 22.3%

20.0% 22.3%

SG&A as a % a Revenue as of % SG&A a Revenue as of % SG&A 13.7% 10.0% 13.7% 10.6% 10.0% 10.6%

0.0% 0.0%

-10.0% -10.0% FY17A FY18A FY19A FY20E FY21E FY22E FY17A FY18A FY19A FY20E FY21E FY22E KITS Peer median - Eyecare & Digital Healthcare KITS Peer median - DTC & Digital Models (Non-Healthcare) Source: Company SEDAR/SEC filings; Thompson Eikon; ROTHe. Source: Company SEDAR/SEC filings; Thompson Eikon; ROTHe.

Page 13 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Exhibit 23 : KITS had better EBITDA margins than most Eyecare & Exhibit 24 : KITS had better EBITDA margins than about half of its Digital Healthcare peers over the TTM period. DTC & Digital (non-HC) peers over the TTM period.

KITS vs. Eyecare & Digital Healthcare - TTM'3Q20 EBITDA Margin KITS vs. DTC & Digital Models (non-HC) - TTM'3Q20 EBITDA Margin 60.0% 20.0% 14.7% 37.3% 11.3% 40.0% 9.5% 10.0% 8.8% 8.4% 8.4%

20.0% 16.6% 8.4% 7.5% 0.0% 0.0% -2.4% -2.4% -3.6% -5.2% -20.0% -14.5% -10.0%

EBITDA Margin EBITDA -29.8% Margin EBITDA -40.0% -14.3% -20.0%

-60.0%

-30.0% -80.0% -31.1% -82.7% -100.0% -40.0% GDRX (1) ESLX (1) KITS (1) EYE (2) HIMS (3) CVLB (1) SDC (1) YETI (1) PRPL (2) HFGG (2) RVLV (2) ETSY (2) KITS (2) W (2) LOVE (3) CHWY (3) APRN (2) CSPR (2) MWK (2)

(1) Represents TTM period ended 9/30/20. (1) Represents TTM period ended 9/26/20. (2) Represents TTM period ended 9/26/20. (2) Represents TTM period ended 9/30/20. (3) Represents management's EBITDA and revenue estimates for period ended 12/31/20. (3) Represents TTM period ended 11/1/20. Source: Company SEDAR/SEC filings; ROTH Capital Partners. Source: Company SEDAR/SEC filings; ROTH Capital Partners.

Exhibit 25: In 2021, we expect KITS EBITDA margins to erode vs. Exhibit 26: In 2021, we see KITS EBITDA margins declining vs. peer median margins. In 2022, we expect KITS to begin to close the peer median. In 2022, we expect KITS to narrow the gap vs. this gap. peer median.

KITS and Peers - EBITDA Margin KITS and Peers - EBITDA Margin 25.0%

20.0% 16.9% 20.0% 14.1% 16.9%

16.9% 14.1% 14.4% 10.0% 8.7% 8.1% 15.0% 6.5% 5.3% 14.1% 11.6% 10.5% 10.6% 0.6% 10.0% -1.4% 3.0% 0.0% -2.9% 8.7% -5.2% -6.1% 5.0% EBITDA Margin Margin EBITDA Margin EBITDA -10.0% 3.0% 0.0% 0.6%

-20.0% -5.0% -6.1%

-10.0% -30.0% FY17A FY18A FY19A FY20E FY21E FY22E FY17A FY18A FY19A FY20E FY21E FY22E KITS Peer median - Eyecare & Digital Healthcare KITS Peer median - DTC & Digital Models (Non-Healthcare) Source: Company SEDAR/SEC filings; Thompson Eikon; ROTHe. Source: Company SEDAR/SEC filings; Thompson Eikon; ROTHe.

Page 14 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

VALUATION

Our $13 price target is based on a 2.5x multiple applied to our 2022 sales estimate. DTC and digitally-native (non-healthcare) peers trade for a median 3.0x 2021 sales estimates, while eye care and DTC/digital healthcare peers trade for a median 8.0x 2021 sales. We believe Kits is in an earlier stage of its growth relative to most of these peers, and expect the company will likely go through an investment cycle in both opex/capex during 2021. As such, we assign a slightly below-peer median 2.5x EV/sales multiple while looking further out, to our 2022 revenue estimate of $164mn. As Kits proves out its higher-revenue visibility auto- ship program and demonstrates improving GM performance into 2022, we expect to assign a higher multiple.

Exhibit 27: Comparable companies in the DTC and digitally-native category trade for a median 3.0x/37.0x consensus 2021 revenue/EBITDA.

Price Market Ent. EV/ Sales EV/ EBITDA P/E LTM FCF (1) Ticker Company Rating 2/15/2021 Value Net Debt Value CY 21E CY 21E CY 22E CY 21E CY 22E P/B Yield DTC & Digitally-Native Brands APRN Blue Apron Holdings, Inc. NC 10.01 177 (16) 161 0.3x 22.4x 8.9x (4.4x) NA 2.4x (11.9%) CHWY Chewy Inc NC 118.69 48,977 (506) 48,471 5.6x 330.3x 162.9x NA 662.2x -868.0x (0.1%) CSPR Casper Sleep Inc Buy 10.17 412 (80) 332 0.6x NA 33.0x NA NA 11.4x (20.7%) ETSY ETSY Inc Buy 233.86 29,488 (414) 29,073 16.0x 57.1x 43.9x 107.8x 80.1x 41.5x 1.7% HFGG Hellofresh SE NC 91.85 15,970 (647) 15,300 2.8x 26.8x 22.1x 48.2x 38.3x 25.3x 2.7% LOVE Lovesac Co Buy 55.98 822 (48) 774 2.1x 44.2x 25.9x 224.1x 69.6x 9.6x 2.6% MWK Mohawk Group Holdings Inc Buy 43.06 1,166 (11) 1,155 3.3x 39.7x 28.5x NA 93.6x 28.1x (1.5%) PRPL Purple Innovation Inc Buy 39.51 2,546 (54) 2,492 3.0x 25.1x 20.9x 40.7x 34.0x 51.8x 2.5% RVLV Revolve Group Inc Buy 38.74 2,720 (144) 2,576 3.8x 34.8x 26.3x 56.6x 41.6x 15.6x 3.2% W Wayfair Inc NC 292.97 29,135 305 29,441 1.8x 42.6x 29.8x NA 181.7x -19.2x 2.7% YETI Yeti Holdings Inc Neutral 73.04 6,360 (120) 6,241 4.9x 21.5x 18.6x 35.6x 30.0x 22.1x 5.5%

Average 4.0x 64.5x 38.3x 72.7x 136.8x (61.8x) (1.2%) Median 3.0x 37.2x 26.3x 48.2x 69.6x 15.6x 2.5%

KITS Kits Eyecare Ltd (consenus) Buy 8.10 251 (31) 220 1.9x 36.0x 13.0x NA 81.0x 10.3x 0.2% KITS Kits Eyecare Ltd, ROTHe Buy 8.10 251 (31) 220 1.9x NA 73.5x NA NA 10.3x 0.2% (1) KITS LTM FCF yield representative of TTM period ended 9/30/20. Source: Thomson Eikon; ROTH Capital Partners estimates.

Exhibit 28: Legacy eyecare providers include EssilorLuxottica (ESLX – NC) and National Vision Holdings (NVI – NC), while digital healthcare companies include GoodRx (GDRX – NC) and Hims and Hers (HIMS – NC). The median 2021 EV/EBITDA multiple in this cohort is 48x; peers also trade at 8.3x 2021 sales. Price Market Ent. EV/ Sales EV/ EBITDA P/E LTM FCF (1) Ticker Company Rating 2/15/2021 Value Net Debt Value CY 21E CY 21E CY 22E CY 21E CY 22E P/B Yield Eyecare and Digital Healthcare CVLB Conversion Labs Inc NC 29.23 681 4 685 10.9x NA 179.7x NA NA -12.4x (0.8%) ESLX EssilorLuxottica SA NC 165.65 72,722 10,276 78,866 3.8x 16.6x 14.7x 36.6x 32.8x 1.8x 2.3% GDRX Goodrx Holdings Inc NC 55.86 21,861 (379) 21,482 29.1x 91.9x 61.7x 931.0x 182.4x 28.7x 0.5% HIMS (2) Hims & Hers Health Inc NC 22.46 4,076 (1) 4,075 22.8x NA NA NA NA 2.9x (0.1%) EYE National Vision Holdings Inc NC 50.92 4,126 275 4,400 2.3x 19.5x 17.8x 71.0x 59.2x 4.8x 3.2% SDC SmileDirectClub Inc NC 12.73 4,915 43 4,907 5.8x 76.8x 32.1x NA NA 15.6x (6.5%)

Average 12.4x 51.2x 61.2x 346.2x 91.5x 6.9x (0.2%) Median 8.3x 48.2x 32.1x 71.0x 59.2x 3.8x 0.2%

KITS Kits Eyecare Ltd (consenus) Buy 8.10 251 (31) 220 1.9x 36.0x 13.0x NA 81.0x 10.3x 0.2% KITS Kits Eyecare Ltd, ROTHe Buy 8.10 251 (31) 220 1.9x NA 73.5x NA NA 10.3x 0.2% (1) KITS LTM FCF yield representative of TTM period ended 9/30/20. (2) HIMS revenue and EBITDA multiples reflect management's outlook as of October 2020 per 424B3. Source: Thomson Eikon; ROTH Capital Partners estimates.

Page 15 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

COMPANY OVERVIEW

Kits Eyecare Ltd. is a digital eye care platform. Kits offers vision testing, prescription renewals, and products such as contact lenses and eyeglasses through its website, kits.com. Roughly 80% of sales are generated in the United States, while the remaining 20% are from Canada. Kits carries ~40,000 SKUs of contacts and glasses, sourced from third-party brands as well as a Kits private label brand. Kits has served over 600k customers and currently enjoys a 69% repeat rate. Since mid-2020, Kits has been focused on converting existing customers into auto-ship subscription programs for contact lenses. The company is also building its in-house production capabilities for glasses, with the capacity to produce ~2k pairs of glasses each day (in-house lens edging/surfacing). Kits completed its IPO on the TSX in January 2020 at $8.50/share.

A brief history of Kits: Kits was incorporated October 2018 as Kits Eyecare Ltd. Founders Roger Hardy, Sabrina Liak, and Joseph Thompson spent roughly six months refining a business plan and searching for a digital platform. In April 2019 Kits acquired LD Vision Group through a combination of cash and equity to accelerate growth (total $42.7mn CAD; implied 6.4x EV/EBITDA multiple on 2018 results). LD Group was incorporated December 2002 and since then has shipped >8.7mn pairs of contact lenses. In May 2019, LD Group’s name was changed to Kits.com Technologies Inc., and is now a subsidiary of Kits Eyecare Ltd.

Page 16 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

In 2020 we expect Kits’ eyeglasses/contact lens segments to generate 5%/95% of overall sales. The company began selling eyeglasses in early 2020 and is targeting 25-30% of sales from the segment in the long-run.

Exhibit 29: KITS generates the vast majority of its sales via the Exhibit 30: KITS derives ~80% of its revenue from U.S. contact lens product category. consumers.

KITS - Sales by Category (2020E) KITS - Sales by Geography (2019) (1)

Eyeglasses, ROTHe 5.0% Canada and ROW 20.5%

Contact lenses, ROTHe 95.0%

U.S. 79.5%

(1) Includes sales from 4/5/19-12/31/19. Source: KITS SEDAR Filings; ROTH Capital Partners. Source: KITS SEDAR Filings; ROTH Capital Partners.

Kits generates 69%/31% of its sales from repeat customers/new customers. We expect that as the auto-ship program gains traction, the mix of repeat customers will continue to grow .

Exhibit 31: Nearly 60% of orders came from customers making their third (or more) purchase. KITS - Order mix (2019)

New customers 31.0% 6th or Greater Purchase 35%

2nd purchase 11.0%

3rd-5th purchase 23%

Source: KITS SEDAR filings and website; ROTH Capital Partners.

Page 17 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Exhibit 32 : KITS contact lens revenue has grown at a 19% three - Exhibit 33 : After launching the eyeglasses category in early 2020 year CAGR, we expect it to grow at a 35% three-year CAGR we expect the offering to grow at a 136% three-year CAGR through 2023. through 2023.

KITS Contact Lens Revenue - ROTHe (2018-2022E) KITS Eyeglasses Revenue - ROTHe (2020E-2022E) 200.0 350.0% 200.0 350.0%

180.0 180.0 300.0% 300.0% 160.0 160.0

140.0 250.0% 140.0 250.0%

120.0 120.0 200.0% 200.0% 100.0 100.0

150.0% Growth YoY 150.0% Growth YoY

Revenue ($mn) Revenue 80.0 ($mn) Revenue 80.0

60.0 100.0% 60.0 100.0%

40.0 40.0 50.0% 50.0% 20.0 20.0

0.0 0.0% 0.0 0.0% 2018A 2019A 2020E 2021E 2022E 2023E 2020E 2021E 2022E 2023E Contact lenses (LHS) 47.6 49.9 71.9 106.2 140.1 175.2 Eyeglasses (LHS) 2.7 10.7 23.7 34.9 Contact lenses, YoY growth (RHS) 10.9% 4.9% 258.8% 47.8% 32.0% 25.0% Eyeglasses, YoY growth (RHS) 0.0% 304.8% 121.2% 47.0% Source: KITS SEDAR Filings; ROTH Capital Partners. Source: KITS SEDAR Filings; ROTH Capital Partners.

Exhibit 34: We anticipate the contact lens offering will see near- Exhibit 35: We see the eyeglasses offering expanding its gross term gross margin headwinds from discounting to drive the auto- margins as we see lower reliance on discounting and ship program. promotional sales.

KITS Contact Lens Gross Margin - ROTHe (2018-2022E) KITS Eyeglasses Gross Margin - ROTHe (2020E-2022E) 50.0% 50.0%

45.0% 45.0%

40.0% 40.0%

35.0% 35.0%

30.0% 30.0%

25.0% 25.0%

Gross Margin Gross 20.0% Margin Gross 20.0%

15.0% 15.0%

10.0% 10.0%

5.0% 5.0%

0.0% 0.0% 2018A 2019A 2020E 2021E 2022E 2023E 2020E 2021E 2022E 2023E Contact lense gross margin 27.7% 28.0% 26.7% 22.0% 26.0% 27.0% Eyeglasses gross margin 25.2% 30.0% 36.0% 42.0% Source: KITS SEDAR Filings; ROTH Capital Partners. Source: KITS SEDAR Filings; ROTH Capital Partners.

Page 18 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Kits’ gross margin is largely sensitive to product mix and pricing. Contact lenses generate meaningfully lower gross margins (~25%) given a large concentration of well- established third party brands. However, the eyeglasses product offering generates close to double the gross margin of contact lenses (>50%) due to the vertically integrated manufacturing that Kits is kick starting. Despite its relatively high mix of Kits-branded sales (~70% of 2019 sales) Kits could see margin pressure from growing penetration of third-party brands.

Exhibit 36: KITS gross margins have been historically stable in the ~27-28% range. We expect GMs to erode in 2021 as Kits offers discounts to convert customers into auto-ship arrangements, and as Kits provides certain discounts to incentivize customers to purchase glasses. We expect steady improvement in 2022/2023 and beyond. KITS - Gross Margin (2018-2023E) 35.0%

30.0% 29.5% 27.7% 27.4% 27.1% 27.4%

25.0% 22.7%

20.0%

Gross Margin Gross 15.0%

10.0%

5.0%

0.0% 2018A 2019A 2020E 2021E 2022E 2023E

Source: KITS SEDAR filings and website; ROTH Capital Partners.

Page 19 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Contact lenses (~95% of revenue in 2020; ROTHe 25-30% GPM) KITS offers contact lenses for daily, weekly, and monthly use across third-party and the proprietary KITS brand. Notably, >10% of contact lens customers signed up for auto- ship (a subscription for lens delivery at pre-determined intervals) while checking out as of 3Q20. Importantly, management is targeting auto-ship penetration north of 25% for contact lens customers over a multi-year period. Since 2002, LD Group (owned by KITS since Apr. 2019) has shipped >8.7mn contact lenses. Importantly, and unlike the Kits’ glasses offering, third parties manufacture KITS-branded contact lenses.

Exhibit 37: The contact lens product category is the larger of two segments; the silicone hydrogel KITS-branded contact lenses retail at a price point comparable to branded peers. KITS: Contact Lens Segment

Type Brands Available Product Examples

Daily Disposables KITS Acuve Alcon Bausch & Lomb Coopervision

Weekly Disposables Acuve Alcon Bausch & Lomb Coopervision

Monthly Disposables KITS Acuve Alcon Bausch & Lomb Coopervision

Toric Lenses Acuve Alcon Bausch & Lomb Coopervision

Bifocal & Multifocal Acuve Alcon Bausch & Lomb Coopervision

Source: KITS SEDAR filings and website; ROTH Capital Partners.

Page 20 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Our analysis of Kits and competitor websites suggest that Kits is competitively priced vs. peers. Notably, Kits offers the lowest price in the contacts category when auto-ship is considered.

Exhibit 38: Daily contact lens pricing (calculated cost of daily use). Brand: Product KITS 1800 Contacts DiscountContactLenses Warby Parker Lens Direct LensCrafters VisionWorks $1.33 $1.53 $1.07 $1.27 NA NA $1.50 Acuvue: 1-Day Acuvue Define (30 pack) NA $1.23 NA NA NA NA NA $0.93 NA NA NA NA NA NA $1.10 $1.17 $1.10 $1.09 $1.13 $1.28 $1.18 Alcon: Dailies Total 1 (90 Pack) NA $0.93 $1.03 NA NA $1.09 NA $0.77 NA NA NA $0.91 NA NA $0.93 $1.17 $1.03 $1.13 $1.04 $1.30 NA Bausch & Lomb: Biotrue ONEday for Astigmatism (30 pack) NA $0.93 NA NA NA $1.10 NA $0.65 NA NA NA $0.83 NA NA $0.67 $0.78 $0.68 $0.77 $0.69 $0.87 $0.89 Coopervision: Clariti 1 Day (90 Pack) NA $0.62 NA NA NA $0.74 NA $0.47 NA NA NA $0.55 NA NA $0.80 KITS Private Label (15 pack) NA $0.56 List Price/One-Time Purchase Discounted Price/One-Time Purchase Auto Ship Price Source: KITS SEDAR filings; Company websites; ROTH Capital Partners.

Exhibit 39: Weekly contact lens pricing (calculated cost of daily use). Brand: Product KITS 1800 Contacts DiscountContactLenses Warby Parker Lens Direct LensCrafters VisionWorks $0.56 $0.93 $0.74 $0.86 $0.79 $0.99 $1.02 Acuvue: Oasys with HYDRACLEAR PLUS (12 Pack) NA $0.74 NA NA NA $0.89 NA $0.39 NA NA NA $0.64 NA NA $0.93 $1.31 $0.98 $1.29 $1.05 $1.31 NA Alcon: FreshLook Handling Tint (6 pack) NA $1.05 NA NA NA $1.18 NA $0.65 NA NA NA $0.84 NA NA $0.62 $0.71 $0.55 $0.69 $0.62 $0.71 $0.76 Bausch & Lomb: SoftLens 38 (6 pack) NA $0.57 NA NA NA $0.64 NA $0.43 NA NA NA $0.49 NA NA $0.71 $0.83 $0.83 $0.81 $0.81 $0.83 $0.83 Coopervision: Biomedics 55 Premier (6 pack) NA $0.67 NA NA NA $0.75 NA $0.50 NA NA NA $0.64 NA NA

KITS Private Label

List Price/One-Time Purchase Discounted Price/One-Time Purchase Auto Ship Price Source: KITS SEDAR filings; Company websites; ROTH Capital Partners.

Exhibit 40: Monthly contact lens pricing (calculated cost of daily use). Brand: Product KITS 1800 Contacts DiscountContactLenses Warby Parker Lens Direct LensCrafters VisionWorks $0.25 $0.36 $0.28 $0.36 $0.30 $0.38 NA Acuvue: Oasys with HYDRACLEAR PLUS (12 Pack) NA $0.28 NA NA NA $0.34 NA $0.17 NA NA NA $0.24 NA NA $0.29 $0.39 $0.29 $0.33 $0.30 $0.38 $0.39 Alcon: FreshLook Handling Tint (6 pack) NA $0.31 NA NA NA $0.34 NA $0.21 NA NA NA $0.24 NA NA $0.32 $0.39 $0.33 $0.37 $0.31 $0.42 NA Bausch & Lomb: SoftLens 38 (6 pack) NA $0.31 NA NA NA $0.37 NA $0.22 NA NA NA $0.25 NA NA $0.33 $0.33 $0.24 $0.32 $0.25 $0.36 $0.36 Coopervision: Biomedics 55 Premier (6 pack) NA $0.27 NA NA NA $0.32 NA $0.23 NA NA NA $0.20 NA NA $0.15 KITS Private Label NA $0.11 List Price/One-Time Purchase Discounted Price/One-Time Purchase Auto Ship Price Source: KITS SEDAR filings; Company websites; ROTH Capital Partners.

Page 21 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Exhibit 41: Toric contact lens pricing (calculated cost of daily use). Brand: Product KITS 1800 Contacts DiscountContactLenses Warby Parker Lens Direct LensCrafters VisionWorks $6.50 $9.33 $6.00 $8.33 $6.52 $9.50 NA Acuvue: Oasys for Astigmatism (6 pack) NA $7.47 NA NA $5.21 $9.05 NA $4.55 NA NA NA NA NA NA $9.99 $13.33 $10.00 $11.83 $10.66 $14.00 NA Alcon: Air Optix for Astigmatism (6 pack) NA $10.67 NA NA NA $12.60 NA $7.00 NA NA NA $8.53 NA NA $0.93 $1.17 $1.03 $1.13 $1.04 $1.30 NA Bausch & Lomb: Biotrue ONEday for Astigmatism (30 pack) NA $0.93 NA NA NA $1.10 NA $0.65 NA NA NA $0.83 NA NA $6.49 $7.50 $5.33 $7.33 $5.84 $7.83 NA Coopervision: Avaira Vitality Toric (6 pack) NA $6.00 NA NA NA $7.05 NA $4.55 NA NA NA $4.67 NA NA

KITS Private Label

List Price/One-Time Purchase Discounted Price/One-Time Purchase Auto Ship Price Source: KITS SEDAR filings; Company websites; ROTH Capital Partners.

Page 22 of 34 Eyeglasses (~5% of revenue in 2020; 50-55% GPM - ROTHe) KITS began offering an assortment of roughly 500 eyeglass styles offered across third party and the KITS owned brand in early 2020. The KITS-branded eyeglasses (both the frame and lenses) retail for $69 CAD an accessible entry point relative to the U.S. average retail price of $351 USD in 2019. Additionally, the owned KITS brand is manufactured internally with more capacity set to come online in the form of two lens surfacing lines and two edging lines ($15mn in capex).

Exhibit 42: The eyeglasses product category, launched in early 2020, is comprised of both 3P and KITs-branded goods. KITS: Eyeglasses Segment

Type/Detail Brands Product Examples

Glasses Gucci Offered in 12 different shapes Tom Ford - KITS Offered in these materials: Acetate KITSxVasuma Metal Ray Ban Plastic Polycarbonate Dior Stainless Steel Oakley

Sunglasses Offered in 12 different shapes - Offered in these materials: Acetate Metal Plastic Polycarbonate Stainless Steel

KITS EYECARE LTD. Company Note - February 16, 2021

Exhibit 43: Compared to peers KITS is more affordable in primarily two ways (1) its private label offering is considerably more affordable than 3 of its 4 peers, and (2) KITS is able to sell third-party brands at a lower price than peers largely as a result of its lower cost lenses. Eyeglasses (1) KITS Warby Parker EyeBuy Direct Felix Gray LensCrafters Private label, basic offering (2) $69.00 $95.00 $12.95 $145.00 $190.00 Private label, basic offering (3) $99.00 $195.00 $95.95 NA NA

Ray-Ban RX 3447v $167.00 NA $173.00 NA $292.00 Ray-Ban RX 6375 $198.00 NA $163.00 NA $252.00 Oakley Currency $224.00 NA $442.00 NA $310.00 Oakley Steel Plate $203.00 NA $398.00 NA $288.00 Gucci GG0209O $190.00 NA NA NA NA Gucci GG0213O $370.00 NA NA NA NA Gucci GG0121O NA NA NA NA $379.00 Gucci GG0241O NA NA NA NA $654.00 Tom Ford FT5541-B $200.00 NA NA NA NA Tom Ford FT5313 $267.00 NA NA NA NA Tom Ford FT 5626-B NA NA NA NA $429.00 Tom Ford FT 5611 NA NA NA NA $609.00 (1) Assumes most basic prescription grade lens with no additional treatment or coatings. No insurance assumed. (2) Represents lowest price private label offering. (3) Represents highest price private label offering. Source: KITS SEDAR filings; Company websites; ROTH Capital Partners.

Page 24 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

MANAGEMENT AND CORPORATE GOVERNANCE

Founder and CEO Roger Hardy owns a collective 27% stake (8.5mn common shares) while the previous owners of LD Group hold 34% (10.6mn common shares). Co- Founders include current CEO Roger Hardy, CFO Sabrina Liak, and COO Joseph Thompson with COO Arshil Abdulla joining in Apr’19 following the acquisition of LD Group by KITS, while CMO Rob Long joined the company in Jan’2020.

Exhibit 44: KITS management. Leadership Biography Executive Officers Roger Hardy ●CEO, Co-Founder, and Chairman of KITS' Board; effective Oct '18. Founder, Chairman and CEO ● Served as CEO and Co-Founder of Coastal, listed on the TSX and NASDAQ, which was acquired by Essilor in '14. ● CEO and Chairman of Hardy Capital, a private investment firm focused on real estate and technology investments, effective '14. ● Awarded the 'Ernst & Young Entrepreneur of The Year®' for Business to Consumer in 2006 for Coastal and again in 2016 for Shoes.com Technologies Inc., of which he was CEO from '14-16. ● BA, Bishop's University Sabrina Liak, CFA ● Serves as CFO, Director, and Co-Founder, effective Oct '18 CFO, Co-Founder and, Director ● Previously served as a private equity Portfolio Manager at Goldman Sachs Investment Partners ("GSIP") and a Managing Director at GSIP. Additionally, served on the Private Investment Committee of GSIP. ● BA (Honours), Business Administration, University of Western Ontario. Arshil Abdulla ● Serves as CTO and Director, effective April '19 Chief Technology Officer ● Prior to joining KITS, Abdulla was a CEO, CTO and Founder of LD Vision Group, a leading online retailer of contact lenses. ● Brother of former Director, Fayaz Abdulla Joseph Thompson ● Serves as COO and Co-Founder, effective Oct '18 Chief Operating Officer and Co-Founder ● Also serves as an Operating Partner at Hardy Capital, effective '17 ● Served as VP of Marketing & Sales at BuildDirect Technologies Inc. ● Served as General Manager of Retail at Amazon.com; where he managed a multi-billion-dollar division and was named to the 2014 Industry Top Executive List. ● Harvard Business School and B.B.A., Wilfrid Laurier University School of Business and Economics Rob Long ● Serves as Chief Marketing Officer, effective Jan '20 Chief Marketing Officer ● Served with Mr. Hardy at Coastal in 2007 taking on several roles: Country Manager (U.S.), Regional Manager (UK), and Global Marketing Director. ● Served as E-Commerce Director for EyeBuyDirect.com in 2014, and lead the Direct to Consumer division at Dyson in 2016. ● B.B.A., Simon Fraser University & MBA , Kellog School of Management at Northwestern and York's Schulich School of Business Source: KITS SEDAR filings.

The KITS Board of Directors consists of four independent members and two executive officers; no term limits currently. The company’s five-member board includes seats for Co- Founders Roger Hardy and Sabrina Liak. Independent directors include Ted Goldthorpe (CIO at Apollo Investment Management), Nick Bozikis (current CFO of article.com, member since Oct’ 2019), Peter Lee (Sr. Director of Oracle’s Engineering/Data Center operations) and Anne Kavanagh (former Head of Healthcare Investment Banking at Paine Webber).

Exhibit 45: KITS Board of Directors. Leadership Biography Executive Officers Roger Hardy ●CEO, Co-Founder, and Chairman of KITS' Board; effective Oct '18. Founder, Chairman and CEO ● Served as CEO and Co-Founder of Coastal, listed on the TSX and NASDAQ, which was acquired by Essilor in '14. ● CEO and Chairman of Hardy Capital, a private investment firm focused on real estate and technology investments, effective '14. ● Awarded the 'Ernst & Young Entrepreneur of The Year®' for Business to Consumer in 2006 for Coastal and again in 2016 for Shoes.com Technologies Inc., of which he was CEO from '14-16. ● BA, Bishop's University Sabrina Liak, CFA ● Serves as CFO, Director, and Co-Founder, effective Oct '18 CFO, Co-Founder and, Director ● Previously served as a private equity Portfolio Manager at Goldman Sachs Investment Partners ("GSIP") and a Managing Director at GSIP. Additionally, served on the Private Investment Committee of GSIP. ● BA (Honours), Business Administration, University of Western Ontario. Ted Goldthorpe ● Serves as Director, effective Dec '20 Lead Director ● Served as the President of Apollo Investment Corporation, Chief Investment Officer of Apollo Investment Management, and Senior Portfolio Management, US Opportunisitic Credit from '12-16. ● Serves on the board of directors of Crescent Point Energy Corp., a TSX and NYSE listed energy company. ● BA, Commerce, Queen's University Nick Bozikis, CFA ● Serves as Chair of the Audit Committee, effective Oct '19 Director ● Served as the CFO of Coastal and has since held other executive finance roles in DTC retail businesses, such as Lush Handmande Cosmetics and Shoes.com. ● Served as VP of Finance at AIG Investment Group from '16-18. ● Currently serves as CFO of article.com, a fast growing online retailer of home furnishings. Peter Lee ● Serves as Director, effective Dec '20 Director ● Served as Senior Director, Engineering/Data Center Ops, at Oracle Corporation. ● Served as Director of IT Operations at Netflix, Inc. & CEO of Lensway AB, one of Europe's largest online eyewear companies. ● B.S., Aeronautical and Astronautical Engineering, Ohio State University Anne Kavanagh ● Serves as Director and Chair of the Compensation Committee, effective Dec '20 Director ● Served as Head of Healthcare Investment Banking at Paine Webber, Co-Head of Healthcare Invesment Banking at Salomon Brothers, President and CEO of NatWest Securities , and EVP at Drexel Burnham Lambert. ● Serves as Managing Member of Kavanagh Consulting LLC, a strategic advisory business. ● BA, Finance and Marketing, Boston College Source: KITS SEDAR filings.

Page 25 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Exhibit 46: Management and BoD Compensation. Share Based Option Based Annual Executive Officers Fiscal Year Salary Total Awards Awards Incentive Plan Roger Hardy 2020 $129,000 $82,500 $0 $0 $211,500 Founder, Chairman and CEO Arshil Abdulla 2020 $129,000 $75,208 $0 $0 $204,208 Chief Technology Officer Sabrina Liak 2020 $99,000 $84,845 $0 $0 $183,845 CFO, Corporate Secretary, Director Joseph Thompson 2020 $130,458 $50,000 $0 $0 $180,458 Founder and COO Rob Long 2020 $240,000 $0 $294,000 $50,000 $584,000 Chief Marketing Officer

Expected Fees Share Based Option Based Annual Independent Directors Fiscal Year Total Earned Awards Awards Incentive Plan

Nick Bozikis 2020 $4,150 $4,167 $0 $0 $8,317 Director Peter Lee 2020 $500 $4,167 $0 $0 $4,667 Director Ted Goldthorpe 2020 $1,583 $4,167 $0 $0 $5,750 Director Anne Kavanagh 2020 $750 $4,167 $0 $0 $4,917 Director (1) Does not account for the exercise of the overallotment option.

Source: KITS SEDAR filings.

Exhibit 47: Management and BoD share ownership. Name Common Shares % of Total Shares Out Options (1) RSRs Directors and Executive Officers Roger Hardy 9,126,414 29.4% 345,000 9,706 Arshil Abdulla 4,801,765 15.5% 345,000 8,848 Sabrina Liak 3,940,256 12.7% 345,000 9,583 Joseph Thompson 205,542 0.7% 920,000 5,882 Nick Bozikis 17,050 0.1% 9,200 NA Fayaz Abdulla 3,734,706 12.0% NA NA Total Shares 21,825,733 70.4% Total Shares Outstanding 31,000,003 100.0% Total MGMT Ownership % 70.4% (1) Options strike at $2.70 CAD. Source: KITS SEDAR filings.

Page 26 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

VALUATION

■ Our $13 price target applies a 2.5x multiple to our 2022 sales estimate. DTC and digitally-native (non- healthcare) peers trade for a median 2.8x 2021 sales estimates, while eye care and DTC/digital healthcare peers trade for a median 8.0x 2021 sales. We assign a slightly below-peer median 2.5x EV/sales multiple to our 2022 revenue estimate of $164mn. ■ Factors that would impede shares of KITS from reaching our price target include: (1) execution risk (inability to convert customers into successful auto-ship programs, challenges with the ramp-up of new glasses product line, among others); (2) competitive threats from larger incumbents or other digital competitors in the eyewear industry; and/or (3) excessive cash burn as Kits works to convert new customers into its online platform.

RISKS

■ KITS faces competition from various eyewear brands, specialty retailers, and large format department stores. Increased competition within the space could lead to higher marketing expenses and the loss of or inability to capture market share. ■ The company's success is dependent upon its ability to predict consumer preferences and react appropriately. Failure to successfully anticipate, identify, and react in a timely matter to changing consumer preferences could negatively affect operations. ■ ~20% of the company’s sales in 2019 were outside of the U.S. and as such are not dollar denominated. Fluctuations in the exchange rate, could negatively affect results. ■ The company's subsidiaries rely upon a variety of raw materials in the production of their goods. Fluctuations in the cost to source these inputs or disruptions to the supply of these materials could negatively affect operations. ■ Disruptions including geopolitical tensions and/or public health emergencies could interrupt the supply chain and negatively affect results. ■ The company is dependent upon marketing expenses through major internet platform companies to drive site traffic. ■ KITS operates in regulated industry; a temporary permit to complete ophthalmic assessments and monitoring issued in April 2020 may not be extended. ■ The company relies on the efforts of senior management; the departure of key members could negatively affect results.

COMPANY DESCRIPTION

Kits Eyecare Ltd. (TSX: KITS – Buy) is a digital eye care platform. Kits offers vision testing, prescription renewals, and products such as contact lenses and eyeglasses through its website, kits.com. Roughly 80% of sales are generated in the United States, while the remaining 20% are from Canada. Kits carries ~40,000 SKUs of contacts and glasses, sourced from third-party brands as well as a Kits private label brand. Kits has served over 600k customers and currently enjoys a 69% repeat rate. Since mid-2020, Kits has been focused on converting existing customers into auto-ship subscription programs for contact lenses. The company is also building its in-house production capabilities for glasses, with the capacity to produce ~2k pairs of glasses each day (in-house lens edging/surfacing). Kits completed its IPO on the TSX in January 2020 at $8.50/share.

Page 27 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Kits Eyecare Ltd. (KITS) Matt Koranda ($CAD millions, except per share data) ROTH Capital Partners [email protected] Fiscal Year End in December 949.275.2806 INCOME STATEMENT 2019A 1H20A 3Q20A 4Q20E 2020E 1Q21E 2Q21E 3Q21E 4Q21E 2021E 1Q22E 2Q22E 3Q22E 4Q22E 2022E 2023E Dec-19 Jun-20 Sep-20 Dec-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Dec-22 Dec-23 Revenue 49.9 34.7 20.2 19.6 74.5 22.5 32.1 31.8 30.6 116.9 32.4 45.3 44.9 41.2 163.9 210.1 Consensus (as of 02/15/21) 74.9 116.2 162.2 204.7 Cost of sales 36.3 24.0 14.3 16.0 54.3 17.4 24.9 24.6 23.5 90.3 23.5 33.0 32.6 29.8 118.9 148.1 Gross profit 13.7 10.7 5.9 3.6 20.2 5.1 7.2 7.2 7.1 26.6 8.9 12.4 12.3 11.4 45.0 62.0 Fulfillment 3.5 3.3 2.1 2.2 7.6 3.0 3.0 3.3 3.3 12.6 3.8 3.8 3.8 3.8 15.0 16.0 Marketing 3.9 3.4 2.0 2.8 8.1 4.0 5.0 4.5 4.5 18.0 5.5 5.5 6.0 6.0 23.0 27.0 General & administrative 2.0 1.3 0.6 0.8 2.7 1.2 1.2 1.4 1.4 5.2 1.5 1.5 1.5 1.5 6.0 6.8 D&A 1.8 1.0 0.5 0.5 2.0 0.4 0.4 0.4 0.4 1.7 0.4 0.4 0.4 0.4 1.7 1.7 Operating expenses 11.1 8.9 5.2 6.2 20.4 8.6 9.6 9.6 9.6 37.5 11.2 11.2 11.7 11.7 45.7 51.5 EBIT 2.5 1.8 0.7 (2.7) (0.2) (3.5) (2.4) (2.4) (2.5) (10.9) (2.2) 1.2 0.6 (0.2) (0.7) 10.5

Finance (income) expense 2.4 1.5 0.5 0.3 2.4 0.3 0.2 0.2 0.1 0.8 0.1 0.1 0.1 0.1 0.4 0.1 Other expenses 0.1 0.1 0.2 0.0 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 EBT (0.0) 0.2 0.0 (3.0) (2.8) (3.8) (2.6) (2.6) (2.7) (11.7) (2.4) 1.1 0.5 (0.3) (1.1) 10.4

Taxes 0.1 0.4 0.2 (0.8) (0.3) (1.0) (0.7) (0.7) (0.7) (3.1) (0.6) 0.3 0.1 (0.1) (0.3) 2.8

Net income (loss) (0.1) (0.2) (0.1) (2.2) (2.6) (2.8) (1.9) (1.9) (1.9) (8.5) (1.7) 0.8 0.4 (0.2) (0.8) 7.6 Other comprehensive income (loss) (1.3) 2.0 (1.2) 0.0 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Comprehensive income (loss) (1.5) 1.8 (1.4) (2.2) (1.8) (2.8) (1.9) (1.9) (1.9) (8.5) (1.7) 0.8 0.4 (0.2) (0.8) 7.6

EPS, basic ($0.02) ($0.03) ($0.01) ($0.08) ($0.10) ($0.09) ($0.06) ($0.06) ($0.06) ($0.26) ($0.05) $0.02 $0.01 ($0.01) ($0.02) $0.22 EPS, diluted ($0.02) ($0.01) ($0.01) ($0.08) ($0.10) ($0.09) ($0.05) ($0.05) ($0.06) ($0.24) ($0.05) $0.02 $0.01 ($0.01) ($0.02) $0.21 Consensus (as of 02/15/21) ($0.10) ($0.07) $0.10

Weighted average shares outstanding, basic 6.4 9.2 9.2 26.6 26.6 29.8 33.1 33.2 33.2 33.2 33.3 33.3 33.4 33.4 33.4 33.7 Weighted average shares outstanding, diluted 6.4 16.1 9.2 26.6 26.6 31.3 34.6 34.7 34.8 34.8 34.9 35.0 35.2 35.3 35.3 35.8

EBITDA RECONCILIATION Net income (loss) (0.1) (0.2) (0.1) (2.2) (2.6) (2.8) (1.9) (1.9) (1.9) (8.5) (1.7) 0.8 0.4 (0.2) (0.8) 7.6 Interest 2.4 1.5 0.5 0.3 2.4 0.3 0.2 0.2 0.1 0.8 0.1 0.1 0.1 0.1 0.4 0.1 Depreciation and amortization 1.8 1.0 0.5 0.5 2.0 0.4 0.4 0.4 0.4 1.7 0.4 0.4 0.4 0.4 1.7 1.7 Income tax expense 0.1 0.4 0.2 (0.8) (0.3) (1.0) (0.7) (0.7) (0.7) (3.1) (0.6) 0.3 0.1 (0.1) (0.3) 2.8 EBITDA 4.2 2.7 1.1 (2.2) 1.6 (3.1) (2.0) (2.0) (2.1) (9.2) (1.8) 1.6 1.0 0.2 1.0 12.2 Adjustments Share-based compensation 0.1 0.2 0.3 0.3 0.8 0.4 0.4 0.4 0.4 1.6 0.5 0.5 0.5 0.5 2.0 2.0 One-time costs 0.0 0.2 0.3 0.0 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Adj EBITDA 4.3 3.1 1.7 (1.9) 2.9 (2.7) (1.6) (1.6) (1.7) (7.6) (1.3) 2.1 1.5 0.7 3.0 14.2 Consensus (as of 02/15/21) 6.1 6.1 16.9 Incremental/decremental % -101.9% 4.1% -40.4% -5.9% 230.6% 117.0% -28.9% 1.8% -24.8% 14.1% 27.8% 24.0% 22.2% 22.6% 24.2%

PROFITABILITY RATIOS Gross Margin 27.4% 30.8% 29.4% 18.2% 27.1% 22.6% 22.5% 22.6% 23.2% 22.7% 27.5% 27.3% 27.4% 27.7% 27.4% 29.5% Consensus (as of 02/15/21) 29.8% 28.7% 32.4% 34.4% Operating expense ratio 22.3% 25.6% 25.9% 31.9% 27.3% 38.4% 29.9% 30.3% 31.4% 32.0% 34.4% 24.6% 26.0% 28.3% 27.9% 24.5% Fulfillment 6.9% 9.4% 10.5% 11.2% 10.2% 13.4% 9.3% 10.4% 10.8% 10.8% 11.6% 8.3% 8.3% 9.1% 9.2% 7.6% Marketing 7.8% 9.7% 9.9% 14.1% 10.9% 17.8% 15.6% 14.2% 14.7% 15.4% 17.0% 12.1% 13.4% 14.6% 14.0% 12.9% General & administrative 4.0% 3.6% 3.1% 4.1% 3.6% 5.3% 3.7% 4.4% 4.6% 4.4% 4.6% 3.3% 3.3% 3.6% 3.7% 3.2% D&A 3.6% 2.9% 2.5% 2.5% 2.7% 1.8% 1.3% 1.3% 1.4% 1.4% 1.3% 0.9% 0.9% 1.0% 1.0% 0.8% EBIT Margin 5.1% 5.2% 3.5% -13.8% -0.2% -15.8% -7.4% -7.7% -8.2% -9.3% -6.9% 2.6% 1.4% -0.6% -0.4% 5.0% Adj. EBITDA Margin 8.7% 8.8% 8.5% -9.7% 3.9% -12.2% -4.9% -5.1% -5.5% -6.5% -4.1% 4.6% 3.4% 1.6% 1.8% 6.7% EBT Margin -0.1% 0.5% 0.2% -15.5% -3.8% -17.1% -8.0% -8.2% -8.7% -10.0% -7.3% 2.4% 1.2% -0.8% -0.7% 4.9% Net Margin -0.3% -0.7% -0.7% -11.3% -3.5% -12.5% -5.8% -6.0% -6.3% -7.3% -5.3% 1.7% 0.9% -0.6% -0.5% 3.6% Tax Rate -322.6% 247.8% 500.0% 27.0% 9.1% 27.0% 27.0% 27.0% 27.0% 27.0% 27.0% 27.0% 27.0% 27.0% 27.0% 27.0% -10.4% 8.3% GROWTH RATES (INC STMT) Revenues 5% 68% 54% 49% 56% 58% 57% 56% 57% 44% 41% 41% 35% 40% 28% Direct-to-Consumer gross margin, ROTHe 5% 0% 41% 44% 45% 50% 50% 45% 48% 32% 32% 32% 32% 32% 25% Wholesale gross margin, ROTHe NA 0% NA NA 2200% 600% 300% 175% 305% 200% 175% 160% 50% 121% 47% Cost of Sales 5% 65% 83% 50% -44% -20% 72% 47% 66% 35% 33% 33% 27% 32% 25% Gross Profit 4% 76% -10% 48% -130% -166% 21% 100% 32% 76% 71% 71% 61% 69% 38% Opex 70% 115% 78% 83% 88% 110% 84% 54% 84% 30% 16% 21% 21% 22% 13% Fulfillment 34% 128% 121% 119% 69% 69% 56% 50% 66% 25% 25% 14% 14% 19% 7% Marketing 78% 151% 160% 108% 112% 165% 126% 64% 122% 38% 10% 33% 33% 28% 17% General & administrative 16% 137% -4% 35% 47% 47% 125% 75% 95% 25% 25% 7% 7% 15% 13% D&A 3207% 13% -22% 12% 346% 346% -17% -17% -17% 0% 0% 0% 0% 0% 0% EBIT -62% -24% -738% -106% -83% -85% -441% -7% 6676% -37% -150% -126% -90% -94% -1659% EBT -100% -89% 1247% 9055% -82% -83% -7985% -12% 311% -38% -142% -120% -88% -91% -1051% Net income, reported -103% -146% 829% 1869% -87% -88% 1339% -12% 230% -38% -142% -120% -88% -91% -1051% Adj. EBITDA -35% 25% -312% -34% -87% -90% -195% -10% -365% -51% -234% -195% -139% -139% 374%

Source: Company SEDAR filings and ROTH Capital Partners estimates

Page 28 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Kits Eyecare Ltd. (KITS) Matt Koranda ($CAD millions, except per share data) ROTH Capital Partners [email protected] Fiscal Year End in December 949.275.2806 BALANCE SHEET 2019A 1H20A 3Q20A 4Q20E 2020E 1Q21E 2Q21E 3Q21E 4Q21E 2021E 1Q22E 2Q22E 3Q22E 4Q22E 2022E 2023E Cash & cash equivalents 3.4 0.0 1.8 0.3 0.3 43.2 41.7 36.9 32.9 32.9 30.1 30.4 29.7 28.1 28.1 31.8 Accounts receivable 0.8 0.0 0.7 0.6 0.6 0.7 1.1 1.0 1.0 1.0 1.1 1.5 1.5 1.4 1.4 1.7 Inventories 2.8 0.0 5.3 6.5 6.5 7.0 9.5 9.4 9.0 9.0 9.0 12.6 12.5 11.4 11.4 14.2 Income taxes receivable 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Prepaid expenses and other current assets 0.1 0.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Total current assets 7.2 0.0 8.9 8.5 8.5 52.0 53.4 48.4 44.0 44.0 41.2 45.5 44.7 42.0 42.0 48.7 Total current assets ex surplus funds 7.2 0.0 8.9 8.2 8.2 8.8 11.6 11.5 11.0 11.0 11.1 15.2 15.0 13.8 13.8 16.9

Property & equipment 0.3 0.0 0.4 0.4 0.4 0.8 1.3 4.2 6.2 6.2 7.3 8.5 9.7 10.9 10.9 15.6 Right of use asset 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 Deferred tax asset 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Intangible assets, net 7.9 0.0 6.8 6.4 6.4 6.0 5.7 5.3 5.0 5.0 4.6 4.3 3.9 3.6 3.6 2.2 Goodwill 37.2 0.0 38.2 38.2 38.2 38.2 38.2 38.2 38.2 38.2 38.2 38.2 38.2 38.2 38.2 38.2 Total long-term assets 46.2 0.0 46.7 46.3 46.3 46.3 46.4 49.0 50.6 50.6 51.4 52.3 53.1 53.9 53.9 57.3 Total assets 53.4 0.0 55.5 54.7 54.7 98.3 99.8 97.4 94.6 94.6 92.6 97.8 97.8 95.9 95.9 106.0 Average assets 28.1 0.0 13.9 55.1 54.1 76.5 99.1 98.6 96.0 74.7 93.6 95.2 97.8 96.8 95.2 100.9

Necessary to finance 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Accounts payable 5.0 0.0 6.8 8.3 8.3 8.6 12.3 12.1 11.6 11.6 11.6 16.3 16.1 14.7 14.7 18.2 Income tax payable 0.4 0.0 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 Deferred revenue 1.8 0.0 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 Loan, ST 23.2 0.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Lease liabilities 0.1 0.0 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Total current liabilities 30.6 0.0 12.7 14.2 14.2 14.5 18.2 18.0 17.5 17.5 17.5 22.2 22.0 20.6 20.6 24.1 Total current liabs ex necessary to finance 30.6 0.0 12.7 14.2 14.2 14.5 18.2 18.0 17.5 17.5 17.5 22.2 22.0 20.6 20.6 24.1

Loan, LT 0.0 0.0 18.0 17.3 17.3 8.0 7.3 6.5 5.8 5.8 5.0 4.3 3.5 2.8 2.8 (0.2) Redeemable Class A & C shares 10.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Preferred Class B liabilities and dividend payable 4.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Deferred tax liability 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 Lease liability 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 Total LT liabilities 16.6 0.0 35.6 19.9 19.9 10.6 9.9 9.1 8.4 8.4 7.6 6.9 6.1 5.4 5.4 2.4

Total liabilities, calculated 47.2 0.0 48.4 34.1 34.1 25.1 28.0 27.1 25.8 25.8 25.1 29.0 28.1 26.0 26.0 26.5

Total stockholder's equity 6.2 0.0 7.1 20.6 20.6 73.2 71.8 70.3 68.7 68.7 67.5 68.8 69.7 69.9 69.9 79.5 Average shareholder's equity 3.9 0.0 1.8 13.9 13.4 46.9 72.5 71.0 69.5 44.7 68.1 68.1 69.2 69.8 69.3 74.7 Check 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Current ratio 24% NA 69% 60% 60% 359% 294% 269% 252% 252% 236% 206% 203% 204% 204% 202% Quick ratio 14% NA 28% 14% 14% 311% 241% 216% 200% 200% 184% 148% 146% 148% 148% 143% Cash ratio 11% NA 14% 2% 2% 298% 230% 205% 188% 188% 172% 137% 135% 137% 137% 132%

Equity / assets 12% NA 13% 38% 38% 74% 72% 72% 73% 73% 73% 70% 71% 73% 73% 75% Debt / equity 0% NA 252% 84% 84% 11% 10% 9% 8% 8% 7% 6% 5% 4% 4% 0% Debt / total capital 0% NA 72% 46% 46% 10% 9% 9% 8% 8% 7% 6% 5% 4% 4% 0% Debt / EBITDA (TTM) 0.0x NA -0.7x -0.6x 6.0x -0.3x -1.6x -0.8x -0.8x -0.8x -0.6x -1.7x 5.7x 0.9x 0.9x 0.0x Net debt / equity -55% NA 227% 82% 82% -48% -48% -43% -39% -39% -37% -38% -37% -36% -36% -40% Net debt / total capital -55% NA 64% 45% 45% -43% -44% -40% -36% -36% -34% -36% -36% -35% -35% -40% Net debt / EBITDA (TTM) -79% NA -62% -59% 591% 111% 770% 388% 356% 356% 280% 1026% -4197% -849% -849% -226%

RETURN ON CAPITAL EMPLOYED TTM Operating Income, reported 2.5 3.2 3.0 (0.2) (0.2) (16.6) (7.9) (11.1) (10.9) (10.9) (9.6) (6.0) (2.9) (0.7) (0.7) 10.5 Tax rate -323% -3% -3% 2% 9% 3% 25% 27% 23% 27% 27% 27% 27% 27% 27% 27% NOPAT 10.8 3.3 3.0 (0.2) (0.1) (16.1) (5.9) (8.1) (8.4) (7.9) (7.0) (4.4) (2.1) (0.5) (0.5) 7.7

Accounts receivable 0.8 0.0 0.7 0.6 0.6 0.7 1.1 1.0 1.0 1.0 1.1 1.5 1.5 1.4 1.4 1.7 Inventories - short term 2.8 0.0 5.3 6.5 6.5 7.0 9.5 9.4 9.0 9.0 9.0 12.6 12.5 11.4 11.4 14.2 Accounts payable 0.0 5.0 5.0 5.0 0.0 0.0 6.8 8.3 8.3 8.6 12.3 12.1 11.6 11.6 11.6 14.5 Net working capital (AR + Inv - AP) 3.7 (5.0) 0.9 2.1 7.1 7.8 3.7 2.1 1.7 1.4 (2.2) 2.0 2.4 1.2 1.2 1.4 Property, plant & equipment 0.3 0.0 0.4 0.4 0.4 0.8 1.3 4.2 6.2 6.2 7.3 8.5 9.7 10.9 10.9 15.6 Capital employed (NWC + PP&E) 4.0 (5.0) 1.3 2.5 7.6 8.6 5.0 6.4 7.8 7.6 5.1 10.5 12.1 12.1 12.1 17.0 Average capital employed in period 4.0 (2.5) (2.2) 1.9 5.0 8.1 6.8 5.7 7.1 7.7 6.4 7.8 11.3 12.1 12.1 16.9 Return on Capital Employed (NOPAT/ avg. CE) 268% -130% -139% -8% -3% -199% -86% -142% -118% -103% -110% -56% -19% -4% -4% 45%

DuPont Analysis (ROE Deconstruction) Return on sales (profit margin) 0% -1% -1% -11% -3% -12% -6% -6% -6% -7% -5% 2% 1% -1% 0% 4% Asset turnover (sales / assets) 0.9x NA 1.5x 1.4x 0.9x 0.9x 1.3x 1.3x 1.3x 1.2x 1.4x 1.9x 1.8x 1.7x 1.7x 2.0x Financial leverage (assets / equity) 8.6x NA 7.8x 2.7x 2.7x 1.3x 1.4x 1.4x 1.4x 1.4x 1.4x 1.4x 1.4x 1.4x 1.4x 1.3x Return on equity -2% NA -7% -43% -8% -15% -10% -11% -11% -12% -10% 5% 2% -1% -1% 10%

Net cash per share $0.53 $0.00 $0.20 $0.01 $0.01 $1.38 $1.21 $1.06 $0.95 $0.95 $0.86 $0.87 $0.84 $0.80 $0.80 $0.89 Working capital per share ($3.66) $0.00 ($0.42) ($0.22) ($0.22) $1.20 $1.02 $0.87 $0.76 $0.76 $0.68 $0.67 $0.65 $0.61 $0.61 $0.69 Book value per share $0.97 $0.00 $0.78 $0.78 $0.78 $2.34 $2.07 $2.02 $1.97 $1.97 $1.93 $1.96 $1.98 $1.98 $1.98 $2.22

GROWTH RATES (BALANCE SHEET) Accounts receivable NA NA NA -24% -24% NA NA 48% 56% 56% 44% 41% 41% 35% 35% 28% Inventories NA NA NA 129% 129% NA NA 78% 39% 39% 28% 33% 33% 27% 27% 24% Accounts payable NA NA NA 65% 65% NA NA 77% 39% 39% 35% 33% 33% 27% 27% 24% Source: Company SEDAR filings and ROTH Capital Partners estimates

Page 29 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Kits Eyecare Ltd. (KITS) Matt Koranda ($CAD millions, except per share data) ROTH Capital Partners [email protected] Fiscal Year End in December 949.275.2806 CASH FLOW STATEMENT 2019A 1H20A 3Q20A 4Q20E 2020E 1Q21E 2Q21E 3Q21E 4Q21E 2021E 1Q22E 2Q22E 3Q22E 4Q22E 2022E 2023E Net Income (0.1) (0.2) (0.1) (2.2) (2.6) (2.8) (1.9) (1.9) (1.9) (8.5) (1.7) 0.8 0.4 (0.2) (0.8) 7.6 Depreciation & Amortization 1.8 1.0 0.5 0.5 2.0 0.4 0.4 0.4 0.4 1.7 0.4 0.4 0.4 0.4 1.7 1.7 Depreciation of PP&E 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.3 0.1 0.1 0.1 0.1 0.3 0.3 Amortization of intangible assets 0.4 0.4 0.9 0.4 0.4 0.4 0.4 1.4 0.4 0.4 0.4 0.4 1.4 1.4 Stock-Based Compensation 0.1 0.2 0.3 0.3 0.6 0.4 0.4 0.4 0.4 1.6 0.5 0.5 0.5 0.5 2.0 2.0 Finance Costs 0.5 Income tax expense 0.2 FX gain (loss) (0.0) Amortization of debt issuance costs 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Changes In Operating Assets & Liabilities 25.0 0.0 (0.9) 0.3 0.0 (0.4) 0.9 (0.0) (0.1) 0.4 (0.1) 0.6 (0.0) (0.2) 0.3 0.4 Net Cash from Operating Activities 27.4 0.9 0.5 (1.1) 0.1 (2.4) (0.2) (1.1) (1.2) (4.9) (0.9) 2.3 1.3 0.5 3.2 11.7

Purchase of PP&E (0.1) 0.0 (0.0) (0.1) (0.2) (0.5) (0.5) (3.0) (2.0) (6.0) (1.3) (1.3) (1.3) (1.3) (5.0) (5.0) Acquisitions 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Investment Intangible Assets 0.0 0.0 (0.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Net Cash from Investing Activities (0.1) 0.0 (0.1) (0.1) (0.2) (0.5) (0.5) (3.0) (2.0) (6.0) (1.3) (1.3) (1.3) (1.3) (5.0) (5.0)

Proceeds on credit facility 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Payments on credit facility (0.5) 0.0 (1.1) (0.8) (2.5) (9.2) (0.8) (0.8) (0.8) (11.5) (0.8) (0.8) (0.8) (0.8) (3.0) (3.0) Necessary to Finance 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Net Cash from Financing Activities (0.5) 0.0 (1.3) 14.7 12.8 45.8 (0.8) (0.8) (0.8) 43.5 (0.8) (0.8) (0.8) (0.8) (3.0) (3.0)

FX gain (loss) (0.2) (0.2) 0.0 0.0 0.0

Net Change in Cash 26.8 0.9 (1.1) 13.5 12.4 42.9 (1.4) (4.8) (4.0) 32.6 (2.9) 0.3 (0.7) (1.5) (4.8) 3.7

FREE CASH FLOW PER SHARE $4.27 $0.06 $0.05 ($0.04) ($0.00) ($0.09) ($0.02) ($0.12) ($0.09) ($0.31) ($0.06) $0.03 $0.00 ($0.02) ($0.05) $0.19

OTHER RATIOS / ASSUMPTIONS Days In Quarter 365 91 91 91 548 91 91 91 91 365 91 91 91 91 365 365 Share Based Compensation 0.13 0.18 0.33 0.30 0.63 0.40 0.40 0.40 0.40 1.60 0.50 0.50 0.50 0.50 2.00 2.00 Depreciation to PP&E 535% NA 128% 120% 484% 49% 32% 10% 7% 27% 6% 5% 4% 4% 15% 11% Source: Company SEDAR filings and ROTH Capital Partners estimates

Page 30 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Disclosures:

Within the last twelve months, ROTH has received compensation for investment banking services from Kits Eyecare Ltd. and Mohawk Group Holdings, Inc.. ROTH makes a market in shares of Casper Sleep, Inc., Etsy, Inc., The Lovesac Company, Mohawk Group Holdings, Inc., Purple Innovation, Inc., Revolve Group, Inc. and YETI Holdings, Inc. and as such, buys and sells from customers on a principal basis. ROTH and/or its employees, officers, directors and owners own options, rights or warrants to purchase shares of The Lovesac Company stock.

Rating and Price Target History for: Kits Eyecare Ltd. (KITS.TO) as of 02-15-2021

9.50

9.00

8.50

8.00

7.50 2018 Q1 Q2 Q3 2019 Q1 Q2 Q3 2020 Q1 Q2 Q3 2021 Q1

Created by: BlueMatrix

Rating and Price Target History for: Casper Sleep, Inc. (CSPR) as of 02-15-2021

09/03/20 11/17/20 I:B:$14 B:$10.5 14

12

10

8

6

4

2 2018 Q1 Q2 Q3 2019 Q1 Q2 Q3 2020 Q1 Q2 Q3 2021 Q1

Created by: BlueMatrix

Page 31 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Rating and Price Target History for: Etsy, Inc. (ETSY) as of 02-15-2021

02/21/18 02/27/18 04/30/18 05/09/18 06/14/18 08/07/18 02/13/19 02/25/19 05/01/19 10/31/19 02/26/20 03/19/20 05/07/20 N:$20.5 B:$28 B:$33 B:$34 B:$48 B:$52 B:$64 B:$72 B:$76 B:$59 B:$61 N:$41 N:$61 250

200

150

100

50

0 2018 Q1 Q2 Q3 2019 Q1 Q2 Q3 2020 Q1 Q2 Q3 2021 Q1 05/21/20 07/24/20 08/06/20 10/21/20 01/14/21 N:$67 N:$90 B:$160 B:$165 B:$235

Created by: BlueMatrix

Rating and Price Target History for: The Lovesac Company (LOVE) as of 02-15-2021

07/23/18 12/12/18 12/18/18 02/27/19 04/24/19 04/30/19 05/14/19 09/04/19 10/11/19 12/13/19 02/07/20 04/20/20 06/10/20 I:B:$26 B:$27 B:$28 I:B:$28 B:$33 B:$43 B:$47 B:$37 B:$30 B:$20 UR:NA B:$16 B:$29 60

50

40

30

20

10

0 2018 Q1 Q2 Q3 2019 Q1 Q2 Q3 2020 Q1 Q2 Q3 2021 Q1 06/26/20 09/10/20 12/10/20 B:$33 B:$34 B:$50

Created by: BlueMatrix

Rating and Price Target History for: Mohawk Group Holdings, Inc. (MWK) as of 02-15-2021

07/08/19 08/02/19 02/07/20 03/09/20 05/12/20 06/05/20 07/31/20 08/25/20 11/10/20 12/03/20 02/03/21 I:B:$9 B:$10 UR:NA B:$6 B:$7 B:$8 B:$16 B:$14 B:$12.5 B:$16 B:$37 50

40

30

20

10

0 2018 Q1 Q2 Q3 2019 Q1 Q2 Q3 2020 Q1 Q2 Q3 2021 Q1

Created by: BlueMatrix

Page 32 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Rating and Price Target History for: Purple Innovation, Inc. (PRPL) as of 02-15-2021

10/28/19 11/06/19 02/21/20 09/03/20 11/12/20 I:B:$10 B:$12 UR:NA B:$27 B:$32 50

40

30

20

10

0 2018 Q1 Q2 Q3 2019 Q1 Q2 Q3 2020 Q1 Q2 Q3 2021 Q1

Created by: BlueMatrix

Rating and Price Target History for: Revolve Group, Inc. (RVLV) as of 02-15-2021

09/03/20 I:B:$27 50

40

30

20

10

0 2018 Q1 Q2 Q3 2019 Q1 Q2 Q3 2020 Q1 Q2 Q3 2021 Q1

Created by: BlueMatrix

Rating and Price Target History for: YETI Holdings, Inc. (YETI) as of 02-15-2021

12/17/19 04/15/20 08/07/20 11/06/20 02/12/21 I:B:$37 N:$27 N:$50 N:$60 N:$68 80

70

60

50

40

30

20

10 2018 Q1 Q2 Q3 2019 Q1 Q2 Q3 2020 Q1 Q2 Q3 2021 Q1

Created by: BlueMatrix

Each box on the Rating and Price Target History chart above represents a date on which an analyst made a change to a rating or price target, except for the first box, which may only represent the first note written during the past three years. Distribution Ratings/IB Services shows the number of companies in each rating category from which Roth or an affiliate received compensation for investment banking services in the past 12 month.

Page 33 of 34 KITS EYECARE LTD. Company Note - February 16, 2021

Distribution of IB Services Firmwide IB Serv./Past 12 Mos. as of 02/16/21 Rating Count Percent Count Percent Buy [B] 304 78.35 185 60.86 Neutral [N] 52 13.40 21 40.38 Sell [S] 4 1.03 3 75.00 Under Review [UR] 28 7.22 20 71.43

Our rating system attempts to incorporate industry, company and/or overall market risk and volatility. Consequently, at any given point in time, our investment rating on a stock and its implied price movement may not correspond to the stated 12- month price target. Ratings System Definitions - ROTH employs a rating system based on the following: Buy: A rating, which at the time it is instituted and or reiterated, that indicates an expectation of a total return of at least 10% over the next 12 months. Neutral: A rating, which at the time it is instituted and or reiterated, that indicates an expectation of a total return between negative 10% and 10% over the next 12 months. Sell: A rating, which at the time it is instituted and or reiterated, that indicates an expectation that the price will depreciate by more than 10% over the next 12 months. Under Review [UR]: A rating, which at the time it is instituted and or reiterated, indicates the temporary removal of the prior rating, price target and estimates for the security. Prior rating, price target and estimates should no longer be relied upon for UR-rated securities. Not Covered [NC]: ROTH does not publish research or have an opinion about this security.

ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH. Copyright 2021. Member: FINRA/SIPC.

Page 34 of 34