TerrAscend Corp. (“TerrAscend” or the “Company”) (CSE: TER) (OTCQX: TRSSF), a leading North American cannabis operator, today reported its financial results for the third quarter ending September 30, 2022. All amounts are expressed in U.S. dollars unless indicated otherwise and are prepared under U.S. Generally Accepted Accounting principles (GAAP).
Third Quarter 2022 Financial Highlights
- Net Revenue increased 3.4% sequentially and 36.4% year over year to $67 million.
- Gross Profit Margin was 36.3%, compared to 35.5% in Q2 2022 and 43.7% in Q3 2021.
- Adjusted Gross Profit Margin1 was 46.1%, compared to 47.1% in Q2 2022 and 46.1% in Q3 2021.
- Adjusted EBITDA1 was $11.3 million, an increase of 96% sequentially and 22.8% year over year.
- Adjusted EBITDA Margin1 was 16.9%, compared to 8.9% in Q2 2022 and 18.8% in Q3 of 2021.
- GAAP Net Loss was $311 million, compared to net income of $14.2 million in Q2 2022. A $331 non-cash impairment charge was recorded against goodwill and intangibles for the Company’s Michigan business.
- Cashflow from Operations was positive $1.5 million, compared to negative $16.1 million in Q2 2022.
- Cash and Cash Equivalents totaled $34.3 million as of September 30, 2022. Subsequent to the third quarter, the Company closed on a $45.5 million non-brokered senior secured term loan.
“We took decisive action to reduce our operating expenses in the quarter while still generating record sales. These factors combined to drive substantial improvement in adjusted EBITDA margins quarter over quarter and positive cash flow from operations.” commented Jason Wild, Executive Chairman of TerrAscend, “Our strong brand presence is evidenced by our retail and wholesale results in New Jersey, where we have quickly established ourselves as a leading operator with three of the top ten flower SKUs, including #1. We look forward to deploying our branded strategy in Maryland and Pennsylvania when these states implement adult use.” continued Wild.
Financial Summary Q3 2022 and Comparative Periods
| (in millions of U.S. Dollars) | Q3 2021 | Q2 2022 | Q3 2022 | |||||||||
| Revenue, net | 49.1 | 64.8 | 67.0 | |||||||||
| Quarter-over-Quarter increase | -16.3 | % | 30.5 | % | 3.4 | % | ||||||
| Year-over-Year increase | 28.9 | % | 10.4 | % | 36.4 | % | ||||||
| Gross profit | 21.5 | 23.0 | 24.4 | |||||||||
| Gross profit margin | 43.7 | % | 35.5 | % | 36.3 | % | ||||||
| Adjusted gross profit1 | 22.7 | 30.5 | 30.9 | |||||||||
| Adjusted gross margin % | 46.1 | % | 47.1 | % | 46.1 | % | ||||||
| Share-based compensation expense | 5.2 | 4.4 | 2.6 | |||||||||
| General & Administrative expense (excluding share based compensation) | 16.1 | 29.5 | 26.7 | |||||||||
| % of revenue, net | 32.8 | % | 45.5 | % | 39.8 | % | ||||||
| Net income (loss) | 55.8 | 14.2 | (311.0) | |||||||||
| Adjusted EBITDA1 | 9.2 | 5.8 | 11.3 | |||||||||
| Adjusted EBITDA % of revenue, net | 18.8 | % | 8.9 | % | 16.9 | % | ||||||
| Cash provided by (used in) operations | (17.9) | (16.1) | 1.5 |
| 1. Adjusted Gross Profit and Adjusted Gross Profit Margin, and Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures. Please see discussion of non-GAAP measures and reconciliation to Gross Profit and Net Income (Loss), the closest comparable GAAP measures at the end of this press release. |
Third Quarter 2022 Business and Operational Highlights
- Entered into an agreement to exclusively introduce the Cookies brand to Pennsylvania.
- Appointed Karim Bouaziz as President of the Northeast Region.
- Closed on the acquisition of Pinnacle in Michigan, which includes six dispenary licenses, five of which are currently operational.
- Opened third New Jersey Apothecarium Dispensary in Lodi.
- Opened “Cookies Corners” at all three Apothecarium locations in New Jersey.
Subsequent Events
- Introdroduced Gage and Cookies brands in Pennsylvania.
- Closed on a non-brokered senior secured term loan in an aggregate principal amount of approximately $45.5 million.
Third Quarter 2022 Financial Results
Net revenue for the third quarter totaled $67 million, an increase of 3.4% sequentially and 36.4% year-over-year. The sequential growth was primarily driven by strong results in New Jersey and a partial quarter benefit from the Pinnacle acquisition, partially offset by a decline in wholesale sales in Pennsylvania and challenging retail trends in Pennsylvaniaand Michigan.
Gross margin for the quarter was 36.3%, impacted by a $6 million USD write-off of inventory in Canada. Adjusted gross margin for the quarter, excluding the inventory write-off in Canada, was 46.1% compared to 47.1% in the previous quarter, a decline of 100 basis points sequentially, driven mainly by temporary operational drags from Maryland and Canada. The Company has now fully exited its legacy facility in Maryland and has scaled down the business in Canada such that neither of these areas are expected to be a material drag on gross margin beginning in 2023.
General and Administrative expenses (G&A) for the quarter were reduced by $2.8 million, or almost 10%, to $26.7 million, or 39.8% of revenue, compared to $29.5 million, or 45.5% of revenue, in the second quarter. The $26.7 millionin the third quarter included $3 million of one-time items mainly related to severance and legal settlements. The cost reductions, partly driven by a 12% reduction in the Company’s workforce, are expected to generate further savings into the fourth quarter as the Company realizes a full quarter of the benefit, without the one-time costs.
Adjusted EBITDA for the quarter was $11.3 million versus $5.8 million in the previous quarter, representing a 96% increase sequentially. Adjusted EBITDA margin improved 800 basis points to 16.9% in the third quarter from 8.9% in the second quarter, driven by operating expense reductions.
GAAP net loss for the third quarter was $311 million compared to $14.2 million of net income for the previous quarter. The net loss for the quarter was driven by a $331 million non-cash impairment to goodwill and intangibles of its Michigan business.
Balance Sheet and Cash Flow
Ending cash position for the third quarter was $34.3 million. Following the quarter end, the Company closed on a $45.5 million non-brokered debt financing.
Cash flow from operations totaled a positive $1.5 million in the third quarter, a significant improvement versus negative cash flow from operations of $16.1 million in the second quarter, which included $9 million of taxes paid.
Capital expenditures were $3.6 million in the third quarter, primarily related to the recently completed expansion at TerrAscend’s Hagerstown facility. The Company also closed on the acquisition of Pinnacle, which included a $10 millioncash component.
As of November 11, 2022, there were 324 million shares outstanding including 259 million common shares, 13 million preferred shares as converted, and 52 million exchangeable shares, using the treasury method.
Conference Call
TerrAscend will host a conference call today, November 14, 2022, to discuss these results. Jason Wild, Executive Chairman, Ziad Ghanem, President and Chief Operating Officer, and Keith Stauffer, Chief Financial Officer, will host the call starting at 5:00 p.m. Eastern time. A question-and-answer session will follow management’s presentation.
| DATE: | Monday, November 14, 2022 |
| TIME: | 5:00 p.m. Eastern Time |
| WEBCAST: | Click Here |
| DIAL-IN NUMBER: | 1-888-664-6392 |
| CONFERENCE ID: | 17993713 |
| REPLAY: | 416-764-8677 or 1-888-390-0541 Available until 12:00 midnight Eastern Time Monday, November 28, 2022Replay Code: 993713# |
Financial results and analyses are available on the Company’s website (www.terrascend.com) and SEDAR (www.sedar.com).
The Canadian Securities Exchange (“CSE”) has neither approved nor disapproved the contents of this news release. Neither the CSE nor its Market Regulator (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
Definition and Reconciliation of Non-GAAP Measures
In addition to reporting the financial results in accordance with GAAP, the Company reports certain financial results that differ from what is reported under GAAP. Non-GAAP measures used by management do not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies. The Company believes that certain investors and analysts use these measures to measure a company’s ability to meet other payment obligations or as a common measurement to value companies in the cannabis industry, and the Company calculates Adjusted Gross Profit as Gross Profit adjusted for certain material non-cash items and Adjusted EBITDA as EBITDA adjusted for certain material non-cash items and certain other adjustments management believes are not reflective of the ongoing operations and performance. Such information is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The Company believes this definition is a useful measure to assess the performance of the Company as it provides more meaningful operating results by excluding the effects of expenses that are not reflective of the Company’s underlying business performance and other one-time or non-recurring expenses.
The table below reconciles Gross Profit and Adjusted Gross Profit for the quarters ended September 30, 2022, June 30,2022, and September 30, 2021:
| For the Three Months Ended | ||||||||||||
| (in millions of U.S. Dollars) | September 30, 2021 | June 30, 2022 | September 30, 2022 | |||||||||
| Gross profit | 21,497 | 22,993 | 24,363 | |||||||||
| Add (deduct) the impact of: | ||||||||||||
| Relief of fair value of inventory upon acquisition | 1,163 | 549 | 415 | |||||||||
| Non-cash write downs of inventory | — | 5,894 | 6,037 | |||||||||
| Vape recall | — | 1,071 | — | |||||||||
| Facility transition costs | — | — | 107 | |||||||||
| Adjusted gross profit | 22,660 | 30,507 | 30,922 |
The table below reconciles net loss to EBITDA and Adjusted EBITDA for the quarters ended September 30, 2022, June 30, 2022, and September 30, 2021:
| For the Three Months Ended | ||||||||||||
| September 30, 2021 | June 30, 2022 | September 30, 2022 | ||||||||||
| Net income (loss) | $ | 55,835 | $ | 14,162 | $ | (310,985) | ||||||
| Add (deduct) the impact of: | ||||||||||||
| Provision for income taxes | 4,999 | 4,688 | (34,033) | |||||||||
| Finance expenses | 6,351 | 9,427 | 10,092 | |||||||||
| Amortization and depreciation | 4,200 | 7,046 | 7,110 | |||||||||
| EBITDA | 71,385 | 35,323 | (327,816) | |||||||||
| Add (deduct) the impact of: | ||||||||||||
| Relief of fair value of inventory upon acquisition | 1,163 | 549 | 415 | |||||||||
| Non-cash write downs of inventory | — | 5,894 | 6,037 | |||||||||
| Vape recall | — | 1,071 | — | |||||||||
| Share-based compensation | 5,178 | 4,463 | 2,705 | |||||||||
| Impairment of goodwill and intangible assets | — | 331,242 | 331,242 | |||||||||
| Loss (gain) on disposal of fixed assets | 220 | 929 | (81) | |||||||||
| Revaluation of contingent consideration | (338) | 34 | 36 | |||||||||
| Restructuring and executive severance | 450 | — | 1,443 | |||||||||
| Legal settlements | — | — | 1,170 | |||||||||
| Other one-time items | 1,365 | 924 | 1,311 | |||||||||
| Gain on fair value of warrants and purchase option derivative asset | (69,016) | (47,345) | (5,497) | |||||||||
| Indemnification asset release | 95 | 3,998 | — | |||||||||
| Unrealized and realized loss (gain) on investments | — | 234 | (231) | |||||||||
| Unrealized and realized foreign exchange loss (gain) | (1,256) | (306) | 586 | |||||||||
| Adjusted EBITDA | $ | 9,246 | $ | 337,010 | $ | 11,320 |
About TerrAscend
TerrAscend is a leading North American cannabis operator with vertically integrated operations in Pennsylvania , New Jersey , Michigan and California , licensed cultivation and processing operations in Maryland and licensed production in Canada . TerrAscend operates The Apothecarium and Gage dispensary retail locations as well as scaled cultivation, processing, and manufacturing facilities in its core markets. TerrAscend’s cultivation and manufacturing practices yield consistent, high-quality cannabis, providing industry-leading product selection to both the medical and legal adult-use markets. The Company owns several synergistic businesses and brands, including Gage Cannabis, The Apothecarium, Ilera Healthcare, Kind Tree, Prism, State Flower, Valhalla Confections, and Arise Bioscience Inc. For more information, visit www.terrascend.com .
Caution Regarding Cannabis Operations in the United States
Investors should note that there are significant legal restrictions and regulations that govern the cannabis industry in the United States. Cannabis remains a Schedule I drug under the US Controlled Substances Act, making it illegal under federal law in the United States to, among other things, cultivate, distribute, or possess cannabis in the United States. Financial transactions involving proceeds generated by, or intended to promote, cannabis-related business activities in the United States may form the basis for prosecution under applicable US federal money laundering legislation.
While the approach to enforcement of such laws by the federal government in the United States has trended toward non-enforcement against individuals and businesses that comply with medical or adult-use cannabis programs in states where such programs are legal, strict compliance with state laws with respect to cannabis will neither absolve TerrAscend of liability under U.S. federal law, nor will it provide a defense to any federal proceeding which may be brought against TerrAscend. The enforcement of federal laws in the United States is a significant risk to the business of TerrAscend and any proceedings brought against TerrAscend thereunder may adversely affect TerrAscend’s operations and financial performance.
Forward Looking Information
This news release contains “forward-looking information” within the meaning of applicable securities laws. Forward-looking information contained in this press release may be identified by the use of words such as, “may”, “would”, “could”, “will”, “likely”, “expect”, “anticipate”, “believe, “intend”, “plan”, “forecast”, “project”, “estimate”, “outlook” and other similar expressions, and include statements with respect to future revenue and profits. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors relevant in the circumstances, including assumptions in respect of current and future market conditions, the current and future regulatory environment, and the availability of licenses, approvals and permits.
Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company can give no assurance that they will prove to be correct. Actual results and developments may differ materially from those contemplated by these statements. Forward-looking information is subject to a variety of risks and uncertainties that could cause actual events or results to differ materially from those projected in the forward-looking information. 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 the risk factors set out in the Company’s most recently filed MD&A, filed with the Canadian securities regulators and available under the Company’s profile on SEDAR at www.sedar.com and in the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission on March 17, 2022and as amended on March 24, 2022.
The statements in this press release are made as of the date of this release. The Company disclaims any intent or obligation to update any forward-looking information, whether, as a result of new information, future events, or results or otherwise, other than as required by applicable securities laws.
Unaudited Interim Condensed Consolidated Balance Sheets
(Amounts expressed in thousands of United States dollars, except for per share amounts)
| At | At | |||||||
| September 30, 2022 | December 31, 2021 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 34,288 | $ | 79,642 | ||||
| Restricted cash | 1,031 | — | ||||||
| Accounts receivable, net | 17,937 | 14,920 | ||||||
| Investments | 3,556 | — | ||||||
| Inventory | 49,391 | 42,323 | ||||||
| Prepaid Expenses and other current assets | 7,194 | 6,336 | ||||||
| 113,397 | 143,221 | |||||||
| Non-Current Assets | ||||||||
| Property and equipment, net | 244,125 | 140,762 | ||||||
| Deposits | 1,455 | 1,977 | ||||||
| Operating lease right of use assets | 30,044 | 29,561 | ||||||
| Intangible assets, net | 240,503 | 168,984 | ||||||
| Goodwill | 90,326 | 90,326 | ||||||
| Indemnification asset | — | 3,969 | ||||||
| Other non-current assets | 5,638 | 3,134 | ||||||
| 612,091 | 438,713 | |||||||
| Total Assets | $ | 725,488 | $ | 581,934 | ||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 61,680 | $ | 30,340 | ||||
| Deferred revenue | 2,309 | 1,071 | ||||||
| Loans payable, current | 75,305 | 8,837 | ||||||
| Contingent consideration payable, current | 4,434 | 9,982 | ||||||
| Operating lease liability, current | 1,582 | 1,171 | ||||||
| Lease obligations under finance leases, current | 369 | 22 | ||||||
| Corporate income tax payable | 23,088 | 9,621 | ||||||
| Other current liabilities | 3,575 | – | ||||||
| 172,342 | 61,044 | |||||||
| Non-Current Liabilities | ||||||||
| Loans payable, non-current | 172,322 | 176,306 | ||||||
| Contingent consideration payable, non-current | 1,250 | 2,553 | ||||||
| Operating lease liability, non-current | 31,058 | 30,573 | ||||||
| Lease obligations under finance leases, non-current | 4,698 | 181 | ||||||
| Warrant liability | 679 | 54,986 | ||||||
| Deferred income tax liability | 40,414 | 14,269 | ||||||
| Financing obligations | 11,408 | — | ||||||
| Other long term liabilities | 12,495 | 13,068 | ||||||
| 274,324 | 291,936 | |||||||
| Total Liabilities | 446,666 | 352,980 | ||||||
| Commitments and Contingencies | ||||||||
| Shareholders’ Equity | ||||||||
| Share Capital | ||||||||
| Series A, convertible preferred stock, no par value, unlimited shares authorized; 12,658 and 13,708 shares outstanding as of September 30, 2022 and December 31, 2021, respectively | — | — | ||||||
| Series B, convertible preferred stock, no par value, unlimited shares authorized; 610 and 610 shares outstanding as of September 30, 2022 and December 31, 2021, respectively | — | — | ||||||
| Series C, convertible preferred stock, no par value, unlimited shares authorized; nil and 36 shares outstanding as of September 30, 2022 and December 31, 2021, respectively | — | — | ||||||
| Series D, convertible preferred stock, no par value, unlimited shares authorized; nil and nil shares outstanding as of September 30, 2022 and December 31, 2021, respectively | — | — | ||||||
| Proportionate voting shares, no par value, unlimited shares authorized; nil and nil shares outstanding as of September 30, 2022 and December 31, 2021, respectively | — | — | ||||||
| Exchangeable shares, no par value, unlimited shares authorized; 52,395,071 and 38,890,571 shares outstanding as of September 30, 2022 and December 31, 2021, respectively | — | — | ||||||
| Common stock, no par value, unlimited shares authorized; 257,860,852 and 190,930,800 shares outstanding as of September 30, 2022 and December 31, 2021, respectively | — | — | ||||||
| Additional paid in capital | 877,298 | 535,418 | ||||||
| Accumulated other comprehensive income (loss) | 1,694 | 2,823 | ||||||
| Accumulated deficit | (605,336) | (314,654) | ||||||
| Non-controlling interest | 5,166 | 5,367 | ||||||
| Total Shareholders’ Equity | 278,822 | 228,954 | ||||||
| Total Liabilities and Shareholders’ Equity | $ | 725,488 | $ | 581,934 |
Unaudited Interim Condensed Consolidated Statements of Operations and Comprehensive Loss
(Amounts expressed in thousands of United States dollars, except for per share amounts)
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
| September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||
| Revenue | $ | 67,726 | $ | 50,537 | $ | 183,538 | $ | 169,010 | |||||||||
| Excise and cultivation tax | (701) | (1,398) | (2,050) | (7,794) | |||||||||||||
| Revenue, net | 67,025 | 49,139 | 181,488 | 161,216 | |||||||||||||
| Cost of Sales | 42,662 | 27,642 | 118,992 | 69,942 | |||||||||||||
| Gross profit | 24,363 | 21,497 | 62,496 | 91,274 | |||||||||||||
| Operating expenses: | |||||||||||||||||
| General and administrative | 29,385 | 21,320 | 85,918 | 62,462 | |||||||||||||
| Amortization and depreciation | 3,032 | 1,947 | 8,666 | 5,664 | |||||||||||||
| Impairment of intangible assets | 152,928 | — | 152,928 | 3,633 | |||||||||||||
| Impairment of goodwill | 178,314 | — | 178,314 | 5,007 | |||||||||||||
| Total operating expenses | 363,659 | 23,267 | 425,826 | 76,766 | |||||||||||||
| (Loss) income from operations | (339,296) | (1,770) | (363,330) | 14,508 | |||||||||||||
| Other expense (income) | |||||||||||||||||
| Revaluation of contingent consideration | 36 | (338) | 189 | 2,652 | |||||||||||||
| Gain on fair value of warrants and purchase option derivative asset | (5,497) | (69,016) | (58,555) | (43,715) | |||||||||||||
| Finance and other expenses | 9,469 | 6,972 | 30,227 | 22,281 | |||||||||||||
| Transaction and restructuring costs | 1,359 | 1,034 | 2,601 | 1,466 | |||||||||||||
| Unrealized and realized foreign exchange loss (gain) | 586 | (1,256) | 636 | 4,582 | |||||||||||||
| Unrealized and realized (gain) loss on investments | (231) | — | 3 | (6,192) | |||||||||||||
| (Loss) income before provision from income taxes | (345,018) | 60,834 | (338,431) | 33,434 | |||||||||||||
| Provision for income taxes | (34,033) | 4,999 | (25,602) | 21,372 | |||||||||||||
| Net (loss) income | $ | (310,985) | $ | 55,835 | $ | (312,829) | $ | 12,062 | |||||||||
| Foreign currency translation | (2,758) | 1,745 | 1,129 | (3,469) | |||||||||||||
| Comprehensive (loss) income | $ | (308,227) | $ | 54,090 | $ | (313,958) | $ | 15,531 | |||||||||
| Net (loss) income attributable to: | |||||||||||||||||
| Common and proportionate Shareholders of the Company | $ | (313,212) | $ | 54,428 | $ | (316,352) | $ | 9,594 | |||||||||
| Non-controlling interests | 2,227 | 1,407 | 3,523 | 2,468 | |||||||||||||
| Comprehensive (loss) income attributable to: | |||||||||||||||||
| Common and proportionate Shareholders of the Company | $ | (310,454) | $ | 52,683 | $ | (317,481) | $ | 13,063 | |||||||||
| Non-controlling interests | 2,227 | 1,407 | 3,523 | 2,468 | |||||||||||||
| Net (loss) income per share, basic and diluted | |||||||||||||||||
| Net (loss) income per share – basic | $ | (1.23) | $ | 0.30 | $ | (1.32) | $ | 0.05 | |||||||||
| Weighted average number of outstanding common and proportionate voting shares | 254,355,792 | 184,438,592 | 239,567,866 | 179,441,224 | |||||||||||||
| Net (loss) income per share – diluted | $ | (1.23) | $ | 0.25 | $ | (1.32) | $ | 0.04 | |||||||||
| Weighted average number of outstanding common and proportionate voting shares, assuming dilution | 254,355,792 | 214,134,641 | 239,567,866 | 214,756,569 |
Unaudited Interim Condensed Consolidated Statements of Cash Flows
(Amounts expressed in thousands of United States dollars, except for per share amounts)
| For the Nine Months Ended | ||||||||
| September 30, 2022 | September 30, 2021 | |||||||
| Operating activities | ||||||||
| Net (loss) income | $ | (312,829) | $ | 12,062 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities | ||||||||
| Non-cash write downs of inventory | 14,873 | 961 | ||||||
| Accretion expense | 5,793 | 1,981 | ||||||
| Depreciation of property and equipment and amortization of intangible assets | 19,241 | 11,250 | ||||||
| Amortization of operating right-of-use assets | 1,513 | 1,289 | ||||||
| Share-based compensation | 10,524 | 13,393 | ||||||
| Deferred income tax recovery | (44,266) | (682) | ||||||
| Loss on fair value of warrants and purchase option derivative | (58,555) | (43,715) | ||||||
| Revaluation of contingent consideration | 189 | 2,652 | ||||||
| Impairment of intangible assets | 152,928 | 3,633 | ||||||
| Impairment of goodwill | 178,314 | 5,007 | ||||||
| Loss on disposal of fixed assets | 848 | — | ||||||
| Release of indemnification asset | 3,973 | 3,891 | ||||||
| Forgiveness of loan principal and interest | — | (766) | ||||||
| Unrealized and realized foreign exchange loss | 636 | 4,582 | ||||||
| Unrealized and realized loss (gain) on investments | 3 | (6,192) | ||||||
| Changes in operating assets and liabilities | ||||||||
| Receivables | 4,317 | 1,144 | ||||||
| Inventory | (1,894) | (10,450) | ||||||
| Prepaid expense and deposits | 721 | (523) | ||||||
| Deposits | 2,340 | (408) | ||||||
| Other assets | (1,522) | (4,214) | ||||||
| Accounts payable and accrued liabilities and other payables | (9,530) | (590) | ||||||
| Operating lease liability | (889) | 3,750 | ||||||
| Other liability | (9,627) | (11,394) | ||||||
| Contingent consideration payable | (410) | (14,978) | ||||||
| Corporate income tax payable | 9,451 | 305 | ||||||
| Deferred revenue | 427 | — | ||||||
| Net cash used in operating activities | (33,431) | (28,012) | ||||||
| Investing activities | ||||||||
| Investment in property and equipment | (24,678) | (26,706) | ||||||
| Investment in intangible assets | (1,330) | (342) | ||||||
| Principal payments received on lease receivable | 394 | 559 | ||||||
| Distributions of earnings from associates | — | 469 | ||||||
| Deposits for property and equipment | (1,455) | (1,739) | ||||||
| Deposits for business acquisition | (852) | (25,000) | ||||||
| Payments made for land contracts | (888) | — | ||||||
| Net cash received on acquisition, net of cash paid | 16,227 | (42,736) | ||||||
| Net cash used in investing activities | (12,582) | (95,495) | ||||||
| Financing activities | ||||||||
| Proceeds from options and warrants exercised | 24,158 | 14,042 | ||||||
| Loan principal paid | (6,088) | (2,250) | ||||||
| Loan amendment fee paid | (2,309) | — | ||||||
| Proceeds from loans payable | — | 766 | ||||||
| Cash distributions to NJ partners | (1,436) | — | ||||||
| Capital contributions (paid) received (to) from non-controlling interests | (1,237) | 174 | ||||||
| Payments of contingent consideration | (6,630) | (18,274) | ||||||
| Payments made for financing obligations | (921) | — | ||||||
| Proceeds from private placement, net of share issuance costs | — | 173,477 | ||||||
| Net cash provided by financing activities | 5,537 | 167,935 | ||||||
| Net (decrease) increase in cash and cash equivalents and restricted cash during the period | (40,476) | 44,428 | ||||||
| Net effects of foreign exchange | (3,847) | (1,016) | ||||||
| Cash and cash equivalents and restricted cash, beginning of period | 79,642 | 59,226 | ||||||
| Cash and cash equivalents and restricted cash, end of period | $ | 35,319 | $ | 102,638 | ||||
| Supplemental disclosure with respect to cash flows | ||||||||
| Income taxes paid | $ | 9,213 | $ | 37,032 | ||||
| Interest paid | $ | 20,643 | $ | 17,408 | ||||
| Lease termination fee paid | $ | 3,300 | – | |||||
| Non-cash transactions | ||||||||
| Equity and warrant liability issued as consideration for acquisition | $ | 337,739 | $ | 34,427 | ||||
| Promissory note issued as consideration for acquisitions | $ | 10,000 | $ | 6,750 | ||||
| Investment in NJ Partnership | $ | – | $ | 25,000 | ||||
| Shares issued for liability settlement | $ | 264 | $ | – | ||||
| Accrued capital purchases | $ | 12,118 | $ | 4,655 |
SOURCE TerrAscend
