10-Q: Quarterly report pursuant to Section 13 or 15(d)
Published on May 9, 2024
ROC
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
( State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
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(Address of principal executive offices) |
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Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Name of each exchange on which registered |
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N/A |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of May 8, 2024, the registrant had
Table of Contents
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Page |
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PART I. |
1 |
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Item 1. |
1 |
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Unaudited Interim Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 |
1 |
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2 |
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4 |
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Notes to Unaudited Interim Condensed Consolidated Financial Statements |
5 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
22 |
Item 3. |
33 |
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Item 4. |
33 |
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PART II. |
34 |
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Item 1. |
34 |
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Item 1A. |
34 |
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Item 2. |
34 |
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Item 3. |
34 |
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Item 4. |
34 |
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Item 5. |
34 |
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Item 6. |
34 |
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36 |
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains statements that TerrAscend Corp. (the "Issuer") believes are, or may be considered to be, “forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q regarding the prospects of the industry in which the Issuer, its subsidiaries, TerrAscend Growth Corp. ("TerrAscend") and its subsidiaries (collectively, the "Company") operate or the Company's prospects, plans, financial position or business strategy may constitute forward-looking statements. Such statements can be identified by the use of forward-looking terminology such as "can", “expect”, “likely”, “may”, “will”, “should”, “intend”, “anticipate”, “potential”, “proposed”, “estimate” and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions “may” or “will” happen, or by discussions of strategy. Forward-looking statements include estimates, plans, expectations, opinions, forecasts, projections, targets, guidance, or other statements that are not statements of fact. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements with respect to:
Certain of the forward-looking statements contained herein concerning the cannabis industry and the general expectations of the Company concerning the cannabis industry are based on estimates prepared by the Company using data from publicly-available governmental sources as well as from market research and industry analysis and on assumptions based on data and knowledge of the cannabis industry. Such data is inherently imprecise. The cannabis industry involves risks and uncertainties that are subject to change based on various factors, which factors are described further below.
With respect to the forward-looking statements contained in this Quarterly Report on Form 10-Q, the Company has made assumptions regarding, among other things: (i) its ability to generate cash flows from operations and obtain necessary financing on acceptable terms; (ii) general economic, financial market, regulatory and political conditions in jurisdictions in which the Company operates; (iii) the output from the Company’s operations; (iv) consumer interest in the Company’s products; (v) competition in the cannabis industry; (vi) anticipated and unanticipated costs; (vii) government regulation of the Company’s activities and products; (viii) government regulation of licensing, taxation and environmental protection; (ix) the timely receipt of any required regulatory approvals; (x) the Company’s ability to obtain qualified staff, equipment and services in a timely and cost efficient manner; (xi) the Company’s ability to conduct operations in a safe, efficient and effective manner; and (xii) the Company’s construction plans and timeframe for completion of such plans.
Readers are cautioned that the above list of cautionary statements is not exhaustive. Known and unknown risks, many of which are beyond the control of the Company, could cause actual results to differ materially from the forward-looking statements in this Quarterly Report on Form 10-Q. Such risks and uncertainties include, but are not limited to, current and future market conditions; risks related to federal, state, provincial, territorial, local and foreign government laws, rules and regulations, including federal and state laws in the United States relating to cannabis operations in the United States; and those discussed under Item 1A – “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on March 14, 2024 and this Quarterly Report on Form 10-Q. The purpose of forward-looking statements is to provide the reader with a description of management’s expectations, and such forward-looking statements may not be appropriate for any other purpose. You should not place undue reliance on forward-looking statements contained in this Quarterly Report on Form 10-Q. The Company can give no assurance that such expectations will prove to have been correct. Forward-looking statements contained herein are made as of the date of this Quarterly Report on Form 10-Q and are based on the beliefs, estimates, expectations and opinions of management on the date such forward-looking statements are made. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such forward-looking statements, except as required by applicable law.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
TerrAscend Corp.
Unaudited Interim Condensed Consolidated Balance Sheets
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
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At |
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At |
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March 31, 2024 |
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December 31, 2023 |
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Assets |
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Current Assets |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash |
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Accounts receivable, net |
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Investments |
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Inventory |
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Prepaid expenses and other current assets |
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Non-Current Assets |
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Property and equipment, net |
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Deposits |
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Operating lease right of use assets |
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Intangible assets, net |
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Goodwill |
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Other non-current assets |
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Total Assets |
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$ |
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$ |
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Liabilities and Shareholders' Equity |
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Current Liabilities |
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Accounts payable and accrued liabilities |
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$ |
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$ |
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Deferred revenue |
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Loans payable, current |
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Contingent consideration payable, current |
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Operating lease liability, current |
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Lease obligations under finance leases, current |
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Corporate income tax payable |
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Other current liabilities |
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Non-Current Liabilities |
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Loans payable, non-current |
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Operating lease liability, non-current |
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Lease obligations under finance leases, non-current |
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Derivative liability |
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Convertible debt |
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Deferred income tax liability |
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Contingent consideration payable, non-current |
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— |
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Liability on uncertain tax position and other long term liabilities |
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Total Liabilities |
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Shareholders' Equity |
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Share Capital |
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Series A, convertible preferred stock, par value, shares authorized; |
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Series B, convertible preferred stock, par value, shares authorized; |
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Series C, convertible preferred stock, par value, shares authorized; and shares outstanding as of March 31, 2024 and December 31, 2023, respectively |
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Series D, convertible preferred stock, par value, shares authorized; and shares outstanding as of March 31, 2024 and December 31, 2023, respectively |
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Proportionate voting shares, par value, shares authorized; and shares outstanding as of March 31, 2024 and December 31, 2023, respectively |
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Exchangeable shares, par value, shares authorized; |
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Common shares, par value, shares authorized; |
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Additional paid in capital |
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Accumulated other comprehensive income |
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Accumulated deficit |
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( |
) |
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( |
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Non-controlling interest |
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( |
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Total Shareholders' Equity |
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Total Liabilities and Shareholders' Equity |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
1
TerrAscend Corp.
Unaudited Interim Condensed Consolidated Statements of Operations and Comprehensive Loss
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
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For the Three Months Ended |
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March 31, 2024 |
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March 31, 2023 |
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Revenue, net |
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Cost of Sales |
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Gross profit |
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Operating expenses: |
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General and administrative |
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Amortization and depreciation |
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Impairment of property and equipment and right of use assets |
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Total operating expenses |
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Income from operations |
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Other (income) expense |
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Loss from revaluation of contingent consideration |
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— |
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Loss (gain) on fair value of warrants and purchase option derivative assets |
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( |
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Finance and other expenses |
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Transaction and restructuring costs |
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— |
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Unrealized and realized foreign exchange loss (gain) |
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( |
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Unrealized and realized loss on investments |
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— |
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Loss from continuing operations before provision for income taxes |
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( |
) |
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( |
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Provision for income taxes |
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Net loss from continuing operations |
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$ |
( |
) |
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$ |
( |
) |
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Discontinued operations: |
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Loss from discontinued operations, net of tax |
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$ |
— |
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$ |
( |
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Net loss |
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$ |
( |
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$ |
( |
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Foreign currency translation adjustment |
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( |
) |
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Comprehensive loss |
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$ |
( |
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$ |
( |
) |
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Net loss from continuing operations attributable to: |
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Common and proportionate Shareholders of the Company |
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$ |
( |
) |
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$ |
( |
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Non-controlling interests |
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$ |
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$ |
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Comprehensive loss attributable to: |
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Common and proportionate Shareholders of the Company |
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$ |
( |
) |
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$ |
( |
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Non-controlling interests |
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$ |
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$ |
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Net loss per share |
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Net loss per share - basic: |
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Continuing operations |
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$ |
( |
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$ |
( |
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Discontinued operations |
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$ |
— |
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$ |
( |
) |
Net loss per share - basic |
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$ |
( |
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$ |
( |
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Weighted average number of outstanding common shares |
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Net loss per share - diluted: |
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Continuing operations |
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$ |
( |
) |
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$ |
( |
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Discontinued operations |
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$ |
— |
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$ |
( |
) |
Net loss per share - diluted |
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$ |
( |
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$ |
( |
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Weighted average number of outstanding common shares, assuming dilution |
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The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
2
TerrAscend Corp.
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
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Number of Shares |
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Convertible Preferred Stock |
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Common Shares |
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Exchangeable Shares |
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Series A |
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Series B |
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Common Shares Equivalent |
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Additional paid in capital |
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Accumulated other comprehensive income |
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Accumulated deficit |
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Non-controlling interest |
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Total |
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Balance at December 31, 2023 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Shares issued - stock options, warrant and RSU exercises |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Share-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Options and warrants expired/forfeited |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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— |
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Capital distributions |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Acquisition of non-controlling interest |
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— |
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— |
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— |
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— |
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— |
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Net loss for the period |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
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Foreign currency translation adjustment |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance at March 31, 2024 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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Number of Shares |
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Convertible Preferred Stock |
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Common Shares |
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Exchangeable Shares |
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Series A |
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Series B |
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Common Shares Equivalent |
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Additional paid in capital |
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Accumulated other comprehensive income (loss) |
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Accumulated deficit |
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Non-controlling interest |
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Total |
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Balance at December 31, 2022 |
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$ |
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$ |
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( |
) |
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$ |
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Shares issued - stock options, warrant and RSU exercises |
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— |
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— |
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— |
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— |
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— |
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— |
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Shares, options and warrants issued - acquisitions |
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— |
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— |
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— |
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— |
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— |
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— |
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Shares, options and warrants issued - legal settlement |
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— |
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— |
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— |
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— |
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— |
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— |
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Shares issued- conversion |
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( |
) |
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( |
) |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Share-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Options and warrants expired/forfeited |
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— |
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|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Capital contribution |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net loss for the period |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at March 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
3
TerrAscend Corp.
Unaudited Interim Condensed Consolidated Statements of Cash Flows
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
|
For the Three Months Ended |
|
|||||
|
March 31, 2024 |
|
|
March 31, 2023 |
|
||
Operating activities |
|
|
|
|
|
||
Net loss from continuing operations |
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash provided by operating activities |
|
|
|
|
|
||
Non-cash adjustments of inventory |
|
|
|
|
|
||
Accretion expense |
|
|
|
|
|
||
Depreciation of property and equipment and amortization of intangible assets |
|
|
|
|
|
||
Amortization of operating right-of-use assets |
|
|
|
|
|
||
Share-based compensation |
|
|
|
|
|
||
Deferred income tax expense |
|
( |
) |
|
|
|
|
Loss (gain) on fair value of warrants and purchase option derivative |
|
|
|
|
( |
) |
|
Gain on disposal of fixed assets |
|
|
|
|
|
||
Loss from revaluation of contingent consideration |
|
|
|
|
|
||
Impairment of property and equipment and right of use assets |
|
|
|
|
— |
|
|
Loss on derecognition of right of use assets and lease termination |
|
|
|
|
|
||
Bad debt expense |
|
|
|
|
— |
|
|
Unrealized and realized foreign exchange loss (gain) |
|
|
|
|
( |
) |
|
Unrealized and realized loss on investments |
|
|
|
|
|
||
Changes in operating assets and liabilities |
|
|
|
|
|
||
Receivables |
|
|
|
|
|
||
Inventory |
|
|
|
|
( |
) |
|
Prepaid expense and other current assets |
|
|
|
|
|
||
Deposits |
|
|
|
|
|
||
Other assets |
|
( |
) |
|
|
( |
) |
Accounts payable and accrued liabilities and other payables |
|
( |
) |
|
|
|
|
Operating lease liability |
|
( |
) |
|
|
( |
) |
Other liability |
|
( |
) |
|
|
( |
) |
Uncertain tax position liabilities |
|
|
|
|
— |
|
|
Corporate income tax payable |
|
|
|
|
|
||
Deferred revenue |
|
|
|
|
( |
) |
|
Net cash provided by operating activities- continuing operations |
|
|
|
|
|
||
Net cash used in operating activities - discontinued operations |
|
|
|
|
( |
) |
|
Net cash provided by operating activities |
|
|
|
|
|
||
|
|
|
|
|
|
||
Investing activities |
|
|
|
|
|
||
Investment in property and equipment |
|
( |
) |
|
|
( |
) |
Investment in intangible assets |
|
( |
) |
|
|
( |
) |
Principal payments received on lease receivable |
|
— |
|
|
|
|
|
Success fees related to ATC and other investment |
|
— |
|
|
|
|
|
Payment for land contracts |
|
( |
) |
|
|
( |
) |
Cash portion of consideration paid in acquisitions, net of cash of acquired |
|
( |
) |
|
|
( |
) |
Net cash used in investing activities - continuing operations |
|
( |
) |
|
|
( |
) |
Net cash provided investing activities - discontinued operations |
|
|
|
|
|
||
Net cash used in investing activities |
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
Financing activities |
|
|
|
|
|
||
Transfer of Employee Retention Credit |
|
— |
|
|
|
|
|
Proceeds from loan payable, net of transaction costs |
|
|
|
|
|
||
Proceeds from options and warrants exercised |
|
|
|
|
|
||
Loan principal paid |
|
( |
) |
|
|
( |
) |
Capital distributions paid to non-controlling interests |
|
( |
) |
|
|
( |
) |
Payments made for financing obligations and finance lease |
|
( |
) |
|
|
( |
) |
Net cash (used in) provided by financing activities- continuing operations |
|
( |
) |
|
|
|
|
Net cash used in financing activities- discontinued operations |
|
— |
|
|
|
( |
) |
Net cash (used in) provided by financing activities |
|
( |
) |
|
|
|
|
|
|
|
|
|
|
||
Net increase in cash and cash equivalents and restricted cash during the period |
|
|
|
|
|
||
Net effects of foreign exchange |
|
|
|
|
|
||
Cash and cash equivalents and restricted cash, beginning of the period |
|
|
|
|
|
||
Cash and cash equivalents and restricted cash, end of the period |
$ |
|
|
$ |
|
||
|
|
|
|
|
|
||
Supplemental disclosure with respect to cash flows |
|
|
|
|
|
||
Income taxes paid (refund received) |
$ |
|
|
$ |
( |
) |
|
Interest paid |
$ |
|
|
$ |
|
||
Lease termination fee paid |
$ |
|
|
$ |
— |
|
|
Non-cash transactions |
|
|
|
|
|
||
Equity and warrant liability issued for acquisitions and non-controlling interest |
$ |
|
|
$ |
|
||
Shares issued for Canopy USA arrangement |
$ |
— |
|
|
$ |
|
|
Accrued capital purchases |
$ |
|
|
$ |
|
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
4
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
1. Nature of operations
TerrAscend Corp. (the "Issuer") was incorporated under the Business Corporations Act (Ontario) on
The Company operates under one operating segment, which is the cultivation, production and sale of cannabis products.
The Company owns a portfolio of operating businesses, including:
The common shares in the capital of the Company ("Common Shares") commenced trading on the Canadian Securities Exchange ("CSE") on May 3, 2017 under the ticker symbol "TER" and continued trading on the CSE until the listing of the Common Shares on the Toronto Stock Exchange (the "TSX"). Effective July 4, 2023, the Common Shares commenced trading on the TSX under the ticker symbol "TSND". The Common Shares commenced trading on OTCQX on October 22, 2018 under the ticker symbol "TRSSF", which was subsequently changed to "TSNDF", effective July 6, 2023. The Company’s registered office is located at 77 City Centre Drive, Suite 501, Mississauga, Ontario, L5B 1M5, Canada.
These unaudited interim condensed consolidated financial statements included herein (the “Consolidated Financial Statements”) of the Company and its subsidiaries were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").
The accompanying Consolidated Financial Statements contained in this report are unaudited. In the opinion of management, these Consolidated Financial Statements have been prepared on the same basis as the annual consolidated financial statements and notes thereto of the Company and include all adjustments, consisting only of normal recurring adjustments, considered necessary for the fair presentation of the Company’s financial position and operating results. The results for the three months ended March 31, 2024 are not necessarily indicative of the operating results for the year ended December 31, 2024, or any other interim or future periods.
The accompanying Consolidated Financial Statements have been prepared on the going concern basis, under the historical cost convention, except for certain financial instruments that are measured at fair value as described herein. At March 31, 2024, the Company had an accumulated deficit of $
5
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
to loans maturing within the current year. Therefore, the Company expects that it may need to refinance this debt or access additional capital to continue to fund its operations.
The aforementioned indicators raise substantial doubt about the Company's ability to continue as a going concern for at least one year from the issuance of these Consolidated Financial Statements. The Company believes this concern is mitigated by steps it has taken, or intends to take to improve its operations and cash position, including: (i) identifying access to future capital required to pay down or refinance the Company’s maturing debt, (ii) improved cashflow growth from the Company's consolidated operations, particularly TerrAscend's operations in New Jersey and most recently Maryland with conversion to adult-use sales, and (iii) various cost and efficiency improvements. The Consolidated Financial Statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amounts of and classification of liabilities that may result should the Company be unable to continue as a going concern.
The accompanying Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and notes thereto of the Company for the year ended December 31, 2023 contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission (the "SEC") on March 14, 2024 (the "Annual Report). There were no significant changes to the policies disclosed in Note 2 of the summary of significant accounting policies of the Company’s audited consolidated financial statements for the year ended December 31, 2023 in the Company's Annual Report.
The Company consolidates entities in which it has a controlling financial interest by evaluating whether the entity is a voting interest entity (“VOE”) or a variable interest entity (“VIE”).
In connection with the listing of the Common Shares on the TSX, the Company reorganized its ownership structure to segregate the Company’s Canadian retail operations from TerrAscend's cultivation and manufacturing operations in the United States (the "Reorganization"). Following the completion of the Reorganization, the Company owns
Subsequent to the Reorganization, all operations in the United States have a functional currency of the U.S. dollar ("USD"). Canadian operations continue to have a functional currency of the Canadian dollar ("CAD").
Voting Interest Entities
A VOE is an entity in which (1) the total equity investment at risk is deemed sufficient to absorb the expected losses of the entity, (2) the at-risk equity holders, as a group, have all of the characteristics of a controlling financial interest and (3) the entity is structured with substantive voting rights. The Company consolidates the Canadian operations under a VOE model based on the controlling financial interest obtained through Common Shares with substantive voting rights.
Variable Interest Entities
A VIE is an entity that lacks one or more characteristics of a controlling financial interest defined under the voting interest model. The Company consolidates VIE when it has a variable interest that provide it with (1) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits).
In connection with the Reorganization, TerrAscend issued and sold, on a private placement basis, Class A shares in the capital of TerrAscend ("Class A Shares") for aggregate gross proceeds of $
The Issuer determined that TerrAscend is a VIE, as all of the Company’s U.S. activities continue to be conducted on behalf of the Company which has disproportionately few voting rights. After conducting an analysis of the following VIE factors; purpose and design
6
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
of the VIE, the Protection Agreement in place, the structure of the Company's board of directors (the "Board"), and substantive kick-out rights of the holders of the Class A Shares, it was determined that the Company has the power to direct the activities of TerrAscend. In addition, given the structure of the Class A Shares where all of the losses and substantially all of the benefits of TerrAscend are absorbed by the Company, the Company consolidates as the primary beneficiary in accordance with Accounting Standards Codification ("ASC") 810, Consolidation.
The Company's U.S. operations are consolidated through the VIE model. Therefore, substantially all of the Company's current assets, non-current assets, current liabilities and non-current liabilities are consolidated through the VIE model. The Company's assets and liabilities that are not consolidated through the VIE model include convertible debt, and derivative liability. The Company also consolidates a minimal amount of assets and liabilities within Canada. See Note 21 for more information.
The Company's accounts receivable, net consisted of the following:
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||
Trade receivables |
|
$ |
|
|
$ |
|
||
Sales tax receivable |
|
|
|
|
|
|
||
Other receivables |
|
|
|
|
|
|
||
Provision for current expected credit losses |
|
|
( |
) |
|
|
( |
) |
Total receivables, net |
|
$ |
|
|
$ |
|
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||
Trade receivables |
|
$ |
|
|
$ |
|
||
Less: provision for current expected credit losses |
|
|
( |
) |
|
|
( |
) |
Total trade receivables, net |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Of which |
|
|
|
|
|
|
||
Current |
|
|
|
|
|
|
||
31-90 days |
|
|
|
|
|
|
||
Over 90 days |
|
|
|
|
|
|
||
Less: current expected credit losses |
|
|
( |
) |
|
|
( |
) |
Total trade receivables, net |
|
$ |
|
|
$ |
|
The over 90 days aged balance relates mainly to