|
British Columbia
|
| |
83-2097293
|
|
|
(State or other jurisdiction of incorporation or organization)
|
| |
(I.R.S. employer identification no.)
|
|
|
2801 E. Camelback Road #180
Phoenix, Arizona 85016 |
| |
(623) 887-4990
|
|
|
(Address of principal executive offices and zip code)
|
| |
(Registrant’s telephone number, including area code)
|
|
|
Large accelerated filer
☐
|
| |
Accelerated filer ☐
|
|
|
Non-accelerated filer
☒
|
| |
Smaller reporting company ☒
|
|
| | | |
Emerging growth company ☒
|
|
| | | | | 1 | | | |
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| | | | | 87 | | | |
| | | | | 88 | | |
| | |
Country
|
| |
Patent No.
|
| |
Issued Date
|
| |
Title
|
|
1
|
| |
U.S.
|
| |
D800310
|
| |
October 17, 2017
|
| | Electronic Vaporizer | |
2
|
| |
U.S.
|
| |
10398178
|
| |
September 3, 2019
|
| | Electronic Vaporizer | |
3
|
| |
U.S.
|
| |
10750788
|
| |
August 25, 2020
|
| | Electronic Vaporizer | |
4
|
| |
U.S.
|
| |
11044943
|
| |
June 29, 2021
|
| | Electronic Vaporizer | |
5
|
| |
U.S.
|
| |
16573787
|
| |
March 19, 2020
|
| | Pod Vaping System | |
6
|
| |
U.S.
|
| |
D908278
|
| |
September 21, 2020
|
| | Electronic Vaporizer | |
7
|
| |
U.S.
|
| |
10689243
|
| |
June 23, 2020
|
| | Metered Dispensing Device for Plant Extracts | |
8
|
| |
U.S.
|
| |
10875759
|
| |
September 10, 2020
|
| | Metered Dispensing Device for Plant Extracts | |
9
|
| |
U.S.
|
| |
DM/212544
|
| |
February 5, 2021
|
| | Monlithic Electronic Vaporizer | |
10
|
| |
U.S.
|
| |
D942,677
|
| |
February 1, 2022
|
| | Liquid Medical Device | |
11
|
| |
European Union
|
| |
DM/214262
|
| |
May 19, 2021
|
| | Liquid Medical Device | |
12
|
| |
European Union
|
| |
29/761966
|
| |
May 14, 2021
|
| | Liquid Medical Device | |
| | |
Country
|
| |
Registration Number /
Serial Number |
| |
Registration Date
|
| |
Mark
|
|
1
|
| |
U.S.
|
| |
5326028
|
| |
October 31, 2017
|
| | Liquid | |
2
|
| |
U.S.
|
| |
5367649
|
| |
January 2, 2018
|
| | Liquid 9 | |
3
|
| |
U.S.
|
| |
5218409
|
| |
June 6, 2017
|
| | Tear Shape (design) | |
4
|
| |
U.S.
|
| |
5941427
|
| |
December 24, 2019
|
| | Klik | |
5
|
| |
European Union
|
| |
18054132
|
| |
September 5, 2019
|
| | Infinity | |
6
|
| |
U.S.
|
| |
90128914
|
| |
January 4, 2022
|
| | Dose-cti | |
State
|
| |
License Type held Directly and
Indirectly by Company |
| |
Number of Licenses Allowed by
Law in State |
| |
Number of Licenses/ Applications
arising out of Company Direct and Indirect Involvement |
|
Massachusetts | | |
Vertically Integrated Medical Marijuana Treatment Center
Cultivator, Product Manufacturer, Retailer (Adult-Use)
|
| |
A Person or Entity Having Direct or Indirect Control may not hold more than three licenses of the same license type
|
| |
3 Medical Marijuana Treatment Centers (2 open; 1 provisional license);
4 adult-use Marijuana Establishment Final licenses with authorization to commence operations (1 cultivator license; 1 product manufacturer license; and 2 retailer licenses; all operational) |
|
Ohio | | |
Stand Alone Processor (Medical)
|
| |
A person, entity or subsidiary thereof may only hold a financial interest in or be an owner of one processor license
|
| |
1 license
|
|
Pennsylvania | | |
Grower/Processor (Medical)
|
| |
A person may only be issued one grower/processor license
|
| |
1 license
|
|
| | |
Years Ended
|
| | | | | | | | | | | | | |||||||||
($ in thousands)
|
| |
Dec 31,
2021 |
| |
Dec 31,
2020 |
| |
$
Change |
| |
%
Change |
| ||||||||||||
Revenue
|
| | | | 202,705 | | | | | | 158,409 | | | | | | 44,296 | | | | | | 28% | | |
Cost of goods sold
|
| | | | (152,502) | | | | | | (112,270) | | | | | | (40,232) | | | | | | 36% | | |
Gross profit
|
| | | | 50,203 | | | | | | 46,139 | | | | | | 4,064 | | | | | | 9% | | |
Loss from operations
|
| | | | (39,793) | | | | | | (36,294) | | | | | | (3,499) | | | | | | 10% | | |
Total other income (expense)
|
| | | | (9,236) | | | | | | (21,938) | | | | | | 12,702 | | | | | | -58% | | |
Net loss from continuing operations before income taxes
|
| | | | (49,029) | | | | | | (58,232) | | | | | | 9,203 | | | | | | -16% | | |
Net loss from discontinued operations, net of tax
|
| | | | — | | | | | | (56,490) | | | | | | 56,490 | | | | | | -100% | | |
Net loss
|
| | | | (35,126) | | | | | | (116,418) | | | | | | 81,292 | | | | | | -70% | | |
| | |
Years Ended
|
| | | | | | | | | | | | | |||||||||
($ in thousands)
|
| |
Dec 31,
2021 |
| |
Dec 31,
2020 |
| |
$
Change |
| |
%
Change |
| ||||||||||||
Wages and benefits
|
| | | $ | 17,407 | | | | | $ | 12,927 | | | | | $ | 4,480 | | | | | | 35% | | |
General and administrative
|
| | | | 19,073 | | | | | | 22,170 | | | | | | (3,097) | | | | | | -14% | | |
Sales and marketing
|
| | | | 1,457 | | | | | | 839 | | | | | | 618 | | | | | | 74% | | |
Share-based compensation expense
|
| | | | 3,804 | | | | | | 4,200 | | | | | | (396) | | | | | | -9% | | |
Depreciation and amortization
|
| | | | 17,857 | | | | | | 18,356 | | | | | | (499) | | | | | | -3% | | |
Impairment loss
|
| | | | 30,398 | | | | | | 23,941 | | | | | | 6,457 | | | | | | 27% | | |
Total Operating Expense
|
| | | | 89,996 | | | | | | 82,433 | | | | | | 7,563 | | | | | | 9% | | |
| | |
2021
|
| |
2020
|
| ||||||
Revenues, net
|
| | | $ | 202,705 | | | | | $ | 158,409 | | |
Cost of goods sold
|
| | | | (152,502) | | | | | | (112,270) | | |
Gross profit
|
| | | | 50,203 | | | | | | 46,139 | | |
Operating expenses: | | | | | | | | | | | | | |
Wages and benefits
|
| | | | 17,407 | | | | | | 12,927 | | |
General and administrative
|
| | | | 19,073 | | | | | | 22,170 | | |
Sales and marketing
|
| | | | 1,457 | | | | | | 839 | | |
Share-based compensation
|
| | | | 3,804 | | | | | | 4,200 | | |
Depreciation and amortization
|
| | | | 17,857 | | | | | | 18,356 | | |
Impairment loss
|
| | | | 30,398 | | | | | | 23,941 | | |
Total operating expenses
|
| | | | 89,996 | | | | | | 82,433 | | |
Loss from operations
|
| | | | (39,793) | | | | | | (36,294) | | |
Other income (expense): | | | | | | | | | | | | | |
Interest income
|
| | | | 593 | | | | | | 3,835 | | |
Other income
|
| | | | 74 | | | | | | 1,053 | | |
Change in fair value of warrant liability
|
| | | | 6,001 | | | | | | — | | |
Unrealized loss on investments
|
| | | | (891) | | | | | | (337) | | |
Gain on foreign currency exchange
|
| | | | 14 | | | | | | — | | |
Gain (loss) on sale of assets
|
| | | | 163 | | | | | | (70) | | |
Loan losses
|
| | | | (4,562) | | | | | | (16,416) | | |
Loss on termination of lease
|
| | | | (261) | | | | | | (613) | | |
Interest expense, net
|
| | | | (10,367) | | | | | | (9,390) | | |
Other expense
|
| | | | (9,236) | | | | | | (21,938) | | |
Loss from continuing operations before income taxes
|
| | | | (49,029) | | | | | | (58,232) | | |
Income taxes | | | | | | | | | | | | | |
Income tax benefit (expense)
|
| | | | 13,903 | | | | | | (1,696) | | |
Net loss from continuing operations, net of tax
|
| | | | (35,126) | | | | | | (59,928) | | |
Loss from discontinued operations before income taxes
|
| | | | — | | | | | | (58,257) | | |
Income tax benefit from discontinued operations
|
| | | | — | | | | | | 1,767 | | |
Net loss from discontinued operations, net of tax
|
| | | | — | | | | | | (56,490) | | |
Net loss
|
| | | | (35,126) | | | | | | (116,418) | | |
Other comprehensive (loss) income | | | | | | | | | | | | | |
Foreign currency translation adjustments
|
| | | | (15) | | | | | | 496 | | |
Comprehensive loss
|
| | | $ | (35,141) | | | | | $ | (115,922) | | |
Weighted average number of shares outstanding: | | | | | | | | | | | | | |
Basic and diluted
|
| | |
|
370,002,378
|
| | | |
|
364,562,929
|
| |
Net Loss per common share | | | | | | | | | | | | | |
Basic and diluted
|
| | | $ | (0.09) | | | | | $ | (0.32) | | |
Basic and diluted, from continuing operations
|
| | | $ | (0.09) | | | | | $ | (0.16) | | |
Basic and diluted, from discontinued operations
|
| | | $ | — | | | | | $ | (0.15) | | |
| | |
Years Ended
|
| | | | | | | | | | | | | |||||||||
($ in thousands)
|
| |
Dec 31,
2021 |
| |
Dec 31,
2020 |
| |
$
Change |
| |
%
Change |
| ||||||||||||
Net cash provided by (used in) operating activities
|
| | | $ | (8,599) | | | | | $ | 10,660 | | | | | $ | (19,259) | | | | | | -181% | | |
Net cash provided by (used in) investing activities
|
| | | | 186 | | | | | | (2,520) | | | | | | 2,706 | | | | | | 107% | | |
Net cash provided by (used in) financing activities
|
| | | | 6,514 | | | | | | (3,909) | | | | | | 10,423 | | | | | | 267% | | |
Effect of foreign exchange on cash and cash equivalents
|
| | | | (8) | | | | | | 616 | | | | | | (624) | | | | | | -101% | | |
Net changes in cash and cash equivalents
|
| | | | (1,907) | | | | | | 4,847 | | | | | | (6,754) | | | | | | -139% | | |
| | |
Years Ended
|
| | | | | | | | | | | | | |||||||||
($ in thousands)
|
| |
Dec 31,
2021 |
| |
Dec 31,
2020 |
| |
$
Change |
| |
%
Change |
| ||||||||||||
Working capital
|
| | | $ | 1,389 | | | | | $ | 25,883 | | | | | $ | (24,494) | | | | | | -95% | | |
Year ended December 31, 2021
|
| ||||||||||||||||||||||||||||||||||||
| | |
Technology/
Distribution |
| |
Cannabis
|
| |
Accessories
|
| |
Corporate &
Elim |
| |
Other
|
| |
Total
|
| ||||||||||||||||||
Revenue
|
| | | $ | — | | | | | $ | 41,923 | | | | | $ | 161,662 | | | | | $ | — | | | | | $ | — | | | | | $ | 203,585 | | |
Inter-segment revenue
|
| | | | — | | | | | | — | | | | | | (880) | | | | | | — | | | | | | — | | | | | | (880) | | |
Net revenue
|
| | | $ | — | | | | | $ | 41,923 | | | | | $ | 160,782 | | | | | $ | — | | | | | $ | — | | | | | $ | 202,705 | | |
Year ended December 31, 2020
|
| ||||||||||||||||||||||||||||||||||||
| | |
Technology/
Distribution |
| |
Cannabis
|
| |
Accessories
|
| |
Corporate &
Elim |
| |
Other
|
| |
Total
|
| ||||||||||||||||||
Revenue
|
| | | $ | 54 | | | | | $ | 37,901 | | | | | $ | 122,042 | | | | | $ | — | | | | | $ | — | | | | | $ | 159,997 | | |
Inter-segment revenue
|
| | | | — | | | | | | — | | | | | | (1,588) | | | | | | — | | | | | | — | | | | | | (1,588) | | |
Net revenue
|
| | | $ | 54 | | | | | $ | 37,901 | | | | | $ | 120,454 | | | | | $ | — | | | | | $ | — | | | | | $ | 158,409 | | |
| | |
Carrying
amount |
| |
Contractual cash flows
|
| ||||||||||||||||||||||||
December 31, 2021
|
| |
Total
|
| |
< 6 months
|
| |
6 – 12 months
|
| |
1 – 5 years
|
| ||||||||||||||||||
Accounts payable and accrued liabilities
|
| | | $ | 49,482 | | | | | $ | (49,482) | | | | | | (40,208) | | | | | | (189) | | | | | | (9,085) | | |
Notes payable
|
| | | | 86,613 | | | | | | (87,105) | | | | | | (10,704) | | | | | | (38,629) | | | | | | (37,772) | | |
Total | | | | $ | 136,095 | | | | | $ | (136,587) | | | | | $ | (50,912) | | | | | $ | (38,818) | | | | | $ | (46,857) | | |
| | |
Year Ended December 31, 2021
|
| |||||||||||||||
| | |
Fair value hierarchy
|
| |||||||||||||||
Fair value of assets and liabilities
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |||||||||
Cash and cash equivalents
|
| | | $ | 6,952 | | | | | $ | — | | | | | $ | — | | |
Trade receivables and others
|
| | | | 32,393 | | | | | | — | | | | | | — | | |
Other loans receivable
|
| | | | 4,125 | | | | | | — | | | | | | — | | |
Investments
|
| | | | 102 | | | | | | — | | | | | | 6,596 | | |
Accounts payable and accrued liabilities
|
| | | | 49,482 | | | | | | — | | | | | | — | | |
Warrant liability (1)
|
| | | | — | | | | | | — | | | | | | 2,394 | | |
Notes payable
|
| | | | 86,613 | | | | | | — | | | | | | — | | |
Total | | | | $ | 179,667 | | | | | $ | — | | | | | $ | 8,990 | | |
| | |
Year Ended December 31, 2020
|
| |||||||||||||||
| | |
Fair value hierarchy
|
| |||||||||||||||
Fair value of assets and liabilities
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |||||||||
Cash and cash equivalents
|
| | | $ | 8,859 | | | | | $ | — | | | | | $ | — | | |
Trade receivables and others
|
| | | | 14,568 | | | | | | — | | | | | | — | | |
Blackbird loan receivable
|
| | | | — | | | | | | — | | | | | | 7,128 | | |
Other loans receivable
|
| | | | 10,015 | | | | | | — | | | | | | — | | |
Investments
|
| | | | — | | | | | | 189 | | | | | | 1,000 | | |
Accounts payable and accrued liabilities
|
| | | | 31,086 | | | | | | — | | | | | | — | | |
Notes payable
|
| | | | 71,750 | | | | | | — | | | | | | — | | |
Total | | | | $ | 136,278 | | | | | $ | 189 | | | | | $ | 8,128 | | |
|
Location
|
| |
Square Feet
|
| |
Purpose
|
| |
Segment(s)
|
| |
Leased/Owned
|
|
| Phoenix, AZ | | |
13,115
|
| |
Administrative
|
| |
Corporate,
Accessories |
| |
Leased
|
|
| Cambridge, MA | | |
9,882
|
| |
Distribution
|
| |
Cannabis
|
| |
Leased
|
|
| Taunton, MA | | |
539,273
|
| |
Cultivation and Distribution
|
| |
Cannabis
|
| |
Leased
|
|
| Taunton, MA | | |
N/M
|
| |
Administrative
|
| |
Cannabis
|
| |
Leased
|
|
| Taunton, MA | | |
20,000
|
| |
Distribution
|
| |
Cannabis
|
| |
Leased
|
|
| Brockton, MA | | |
6,000
|
| |
Distribution
|
| |
Cannabis
|
| |
Leased
|
|
| Cleveland, OH | | |
20,725
|
| |
Distribution and manufacturing
|
| |
Cannabis
|
| |
Leased
|
|
| Elyria, OH | | |
6,180
|
| |
Distribution
|
| |
Cannabis
|
| |
Owned
|
|
| White Haven Borough, PA | | |
478,724
|
| |
Cultivation and manufacturing
|
| |
Cannabis
|
| |
Owned
|
|
| Total Square Footage | | |
1,093,899
|
| | | | | | | | | |
| | |
Common Shares
|
| |||||||||
Name and Position of Beneficial Owner
|
| |
Amount and
Nature of Beneficial Ownership |
| |
Percent of
Class |
| ||||||
Mark Scatterday, Director and Former Chief Executive Officer
|
| | | | 33,012,957(1) | | | | | | 9.09% | | |
Tim Conder, Director
|
| | | | 1,393,000(2) | | | | | | * | | |
Jane Batzofin, Director
|
| | | | 1,381,452(3) | | | | | | * | | |
Mark J. Coleman, Director
|
| | | | 631,452(4) | | | | | | * | | |
John Barravecchia, Director
|
| | | | 516,390(5) | | | | | | * | | |
D’Angela Simms, Director
|
| | | | 470,117(6) | | | | | | * | | |
Gary F. Santo, Jr., Chief Executive Officer
|
| | | | 782,982(7) | | | | | | * | | |
Brad Hoch, Chief Financial Officer
|
| | | | 424,842(8) | | | | | | * | | |
Dana Arvidson, Chief Operating Officer
|
| | | | 50,000(9) | | | | | | * | | |
Marshall Horowitz, Former General Counsel
|
| | | | 1,000,000(10) | | | | | | * | | |
All current directors and executive officers as a group (9 persons)
|
| | | | 39,663,192 | | | | | | 11.0% | | |
Name
|
| |
Age
|
| |
Position
|
|
Mark Scatterday | | |
53
|
| | Chairman of the Board | |
Tim Conder | | |
39
|
| | Director | |
Jane Batzofin | | |
47
|
| | Director | |
Mark J. Coleman | | |
63
|
| | Director | |
John Barravecchia | | |
66
|
| | Director | |
D’Angela Simms | | |
46
|
| | Director | |
Gary F. Santo, Jr. | | |
55
|
| | Chief Executive Officer | |
Dana Arvidson | | |
47
|
| | Chief Operating Officer | |
Brad Hoch | | |
52
|
| | Chief Financial Officer | |
Name and Principal Position
|
| |
Year
|
| |
Salary
($) |
| |
Bonus
($) |
| |
Stock
awards ($)(1) |
| |
Option
awards ($)(2) |
| |
Non-equity
incentive plan compensation ($)(3) |
| |
All other
Compensation ($)(4) |
| |
Total
Compensation ($) |
| ||||||||||||||||||||||||
Gary F. Santo, Jr.
Chief Executive Officer and Former President (5) |
| | | | 2021 | | | | | | 381,884 | | | | | | — | | | | | | 2,786,127 | | | | | | — | | | | | | 385,200 | | | | | | — | | | | | | 3,553,211 | | |
| | | 2020 | | | | | | 131,707 | | | | | | — | | | | | | — | | | | | | 182,460 | | | | | | 129,082 | | | | | | — | | | | | | 443,249 | | | ||
Dana Arvidson
Chief Operating Officer(6) |
| | | | 2021 | | | | | | 158,750 | | | | | | — | | | | | | 243,090 | | | | | | — | | | | | | 155,500 | | | | | | — | | | | | | 557,340 | | |
Brad Hoch
Chief Financial Officer(7) |
| | | | 2021 | | | | | | 305,769 | | | | | | — | | | | | | — | | | | | | — | | | | | | 300,000 | | | | | | — | | | | | | 605,769 | | |
| | | 2020 | | | | | | 135,192 | | | | | | — | | | | | | 24,780 | | | | | | 121,640 | | | | | | 145,068 | | | | | | — | | | | | | 426,680 | | | ||
Mark Scatterday,
Former Chief Executive Officer(8) |
| | | | 2021 | | | | | | 164,615 | | | | | | — | | | | | | 303,000(10) | | | | | | — | | | | | | — | | | | | | 707,000(11) | | | | | | 1,174,615 | | |
| | | 2020 | | | | | | 415,962 | | | | | | — | | | | | | — | | | | | | — | | | | | | 400,000 | | | | | | — | | | | | | 815,962 | | | ||
Marshall Horowitz
Former General Counsel (9) |
| | | | 2021 | | | | | | 307,692 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 542,474 | | | | | | 850,166 | | |
| | | 2020 | | | | | | 412,000 | | | | | | — | | | | | | — | | | | | | 233,440 | | | | | | 200,000 | | | | | | — | | | | | | 845,440 | | |
| | |
Option Awards
|
| |
Stock Awards
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Name
|
| |
Number of
Securities Underlying Unexercised Options (#) Exercisable |
| |
Number of
Securities Underlying Unexercised Options (#) Unexercisable |
| |
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Option (#) |
| |
Option
Exercise Price ($) |
| |
Option
Expiration Date |
| |
Number of
Shares or Units of Stock That Have Not Vested(1) |
| |
Market
Value of Shares of Units of Stock That Have Not Vested ($)(2) |
| |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) |
| |
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
| |||||||||||||||||||||||||||
Gary F. Santo Jr., Chief Executive Officer
|
| | | | 450,000 | | | | | | 150,000 | | | | | | — | | | | | | 0.4753 | | | | | | 6/25/2030 | | | | | | 623,946 | | | | | | 315,093 | | | | | | 7,487,351 | | | | | | 1,684,654 | | |
Dana Arvidson, Chief Operating Officer
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 150,000 | | | | | | 58,718 | | | | | | 800,000 | | | | | | 180,000 | | |
Brad Hoch, Chief Financial Officer
|
| | | | 300,002 | | | | | | 99,998 | | | | | | — | | | | | | 0.4753 | | | | | | 6/25/2030 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Mark Scatterday, Former Chief Executive Officer
|
| | | | 1,666,667 | | | | | | — | | | | | | — | | | | | | 0.4135 | | | | | | 11/21/2029 | | | | | | 250,000(4) | | | | | | 126,250 | | | | | | 1,400,000 | | | | | | 315,000 | | |
Marshall Horowitz, Former General Counsel
|
| | | | 600,000 | | | | | | — | | | | | | — | | | | | | 0.3732 | | | | | | 12/31/2022 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | | 400,000 | | | | | | — | | | | | | — | | | | | | 0.4135 | | | | | | 12/31/2022 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Vesting Date
|
| |
Number of
PSUs |
| |||
December 31, 2021
|
| | | | 1,871,837 | | |
December 31, 2022
|
| | | | 3,743,674 | | |
December 31, 2023
|
| | | | 5,615,511 | | |
December 31, 2024
|
| | | | 7,487,351 | | |
Name
|
| |
Fees earned
or paid in cash ($) |
| |
Stock
Awards ($)(1) |
| |
Option
Awards ($) |
| |
Non-equity
Incentive Plan Compensation ($) |
| |
All Other
Compensation ($) |
| |
Total ($)
|
| ||||||||||||||||||
Mark Scatterday
|
| |
See Footnote 2
|
| |
See Footnote 2
|
| |
See Footnote 2
|
| |
See Footnote 2
|
| |
See Footnote 2
|
| |
See Footnote 2
|
| ||||||||||||||||||
Tim Conder
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Jane Batzofin
|
| | | | 45,000 | | | | | | 63,943(3) | | | | | | — | | | | | | — | | | | | | — | | | | | | 108,943 | | |
Mark J. Coleman
|
| | | | 45,000 | | | | | | 63,943(4) | | | | | | — | | | | | | — | | | | | | — | | | | | | 108,943 | | |
John Barravecchia
|
| | | | 60,000 | | | | | | 63,943(5) | | | | | | — | | | | | | — | | | | | | — | | | | | | 123,943 | | |
D’Angela Simms
|
| | | | 50,000 | | | | | | 63,943(6) | | | | | | — | | | | | | — | | | | | | — | | | | | | 113,943 | | |
Period Ended
|
| |
Low Trading
Price (C$) |
| |
High Trading
Price (C$) |
| ||||||
Fourth Quarter Ended December 31, 2021
|
| | | | 0.250 | | | | | | 0.600 | | |
Third Quarter Ended September 30, 2021
|
| | | | 0.465 | | | | | | 0.680 | | |
Second Quarter Ended June 30, 2021
|
| | | | 0.500 | | | | | | 0.720 | | |
First Quarter Ended March 31, 2021
|
| | | | 0.370 | | | | | | 0.920 | | |
Fourth Quarter Ended December 31, 2020
|
| | | | 0.290 | | | | | | 0.550 | | |
Third Quarter Ended September 30, 2020
|
| | | | 0.335 | | | | | | 0.690 | | |
Second Quarter Ended June 30, 2020
|
| | | | 0.215 | | | | | | 0.800 | | |
First Quarter Ended March 31, 2020
|
| | | | 0.155 | | | | | | 0.395 | | |
Period Ended
|
| |
Low Trading
Price (US$) |
| |
High Trading
Price (US$) |
| ||||||
Fourth Quarter Ended December 31, 2021
|
| | | | 0.19 | | | | | | 0.47 | | |
Third Quarter Ended September 30, 2021
|
| | | | 0.37 | | | | | | 0.54 | | |
Second Quarter Ended June 30, 2021
|
| | | | 0.40 | | | | | | 0.59 | | |
First Quarter Ended March 31, 2021
|
| | | | 0.27 | | | | | | 0.75 | | |
Fourth Quarter Ended December 31, 2020
|
| | | | 0.22 | | | | | | 0.44 | | |
Third Quarter Ended September 30, 2020
|
| | | | 0.25 | | | | | | 0.53 | | |
Second Quarter Ended June 30, 2020
|
| | | | 0.14 | | | | | | 0.61 | | |
First Quarter Ended March 31, 2020
|
| | | | 0.09 | | | | | | 0.32 | | |
Plan Category
|
| |
Number of securities
to be issued upon the vesting of RSUs, PSUs and the exercise of outstanding options |
| |
Weighted-average
exercise price of outstanding options |
| |
Number of securities
remaining available for future issuance under equity compensation plans (excluding securities reflected herein)(1) |
| |||||||||
Equity compensation plans approved by securityholders
|
| | | | 32,004,959 | | | | | US$ | 0.6341 | | | | | | 18,445,536 | | |
Equity compensation plans not approved by
securityholders |
| | | | N/A | | | | | | N/A | | | | | | N/A | | |
Total:
|
| | | | 32,004,959 | | | | | US$ | 0.6341 | | | | | | 18,445,536 | | |
|
Exhibit
No. |
| |
Description of Exhibit
|
|
| 2.1 | | | | |
| 2.2* | | | | |
| 3.1 | | | Notice of Articles of TILT Holdings Inc. | |
| 3.2 | | | Articles of TILT Holdings Inc. | |
| 4.1 | | | | |
| 10.1* | | | | |
| 10.2* | | | | |
| 10.3* | | | | |
| 10.4 | | | | |
| 10.5* | | | | |
| 10.6* | | | | |
| 10.7* | | | | |
| 10.8* | | | |
|
Exhibit
No. |
| |
Description of Exhibit
|
|
| 10.9* | | | | |
| 10.10* | | | | |
| 10.11* | | | | |
| 10.12 | | | | |
| 10.13* | | | | |
| 10.14* | | | | |
| 10.15+ | | | | |
| 10.16+ | | | | |
| 10.17+ | | | | |
| 10.18+ | | | Employment Agreement, dated October 28, 2020 between TILT Holdings Inc. and Brad Hoch. | |
| 10.19+ | | | | |
| 10.20+ | | | | |
| 10.21*+ | | | | |
| 10.22+ | | | | |
| 10.23+ | | | | |
| 10.24+ | | | TILT Holdings Inc. Amended and Restated 2018 Stock and Incentive Plan. | |
| 10.25+ | | | |
|
Exhibit
No. |
| |
Description of Exhibit
|
|
| 10.26+ | | | | |
| 10.27+ | | | | |
| 21.1 | | | |
| | |
Page
|
| |||
| | | | F-2 | | | |
CONSOLIDATED FINANCIAL STATEMENTS: | | | | | | | |
| | | | F-3 | | | |
| | | | F-4 | | | |
| | | | F-5 | | | |
| | | | F-6 | | | |
| | | | F-8 | | |
| | |
2021
|
| |
2020
|
| ||||||
ASSETS | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 6,952 | | | | | $ | 8,859 | | |
Trade receivables and others, net
|
| | | | 32,393 | | | | | | 14,568 | | |
Inventories
|
| | | | 55,583 | | | | | | 32,507 | | |
Loans receivable, current portion
|
| | | | 2,453 | | | | | | 2,660 | | |
Prepaid expenses and other current assets
|
| | | | 3,005 | | | | | | 4,556 | | |
Assets held for sale
|
| | | | 500 | | | | | | — | | |
Advances for acquisition target
|
| | | | — | | | | | | 7,411 | | |
Total current assets
|
| | |
|
100,886
|
| | | |
|
70,561
|
| |
Non-current assets | | | | | | | | | | | | | |
Property, plant and equipment, net
|
| | | | 62,360 | | | | | | 66,795 | | |
Right-of-use assets – finance, net
|
| | | | 5,379 | | | | | | 5,144 | | |
Right-of-use assets – operating, net
|
| | | | 5,038 | | | | | | 6,572 | | |
Investments
|
| | | | 6,698 | | | | | | 1,189 | | |
Intangible assets, net
|
| | | | 128,770 | | | | | | 138,637 | | |
Loans receivable
|
| | | | 1,672 | | | | | | 14,483 | | |
Goodwill
|
| | | | 70,545 | | | | | | 98,693 | | |
TOTAL ASSETS
|
| | | $ | 381,348 | | | | | $ | 402,074 | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | |
Accounts payable and accrued liabilities
|
| | | $ | 49,482 | | | | | $ | 31,086 | | |
Warrant liability
|
| | | | 2,394 | | | | | | — | | |
Income tax payable
|
| | | | — | | | | | | 903 | | |
Deferred revenue
|
| | | | 5,177 | | | | | | 6,311 | | |
Finance lease liability, current portion
|
| | | | 955 | | | | | | 831 | | |
Operating lease liability, current portion
|
| | | | 731 | | | | | | 879 | | |
Notes payable, current portion. net of discount
|
| | | | 40,758 | | | | | | 4,668 | | |
Total current liabilities
|
| | | | 99,497 | | | | | | 44,678 | | |
Non-current liabilities | | | | | | | | | | | | | |
Finance lease liability
|
| | | | 5,319 | | | | | | 5,305 | | |
Operating lease liability
|
| | | | 4,927 | | | | | | 6,375 | | |
Notes payable, net of discount
|
| | | | 45,855 | | | | | | 67,082 | | |
Deferred tax liability
|
| | | | 85 | | | | | | 13,949 | | |
TOTAL LIABILITIES
|
| | |
|
155,683
|
| | | |
|
137,389
|
| |
Shareholders’ equity | | | | | | | | | | | | | |
Common stock, no par value, unlimited shares authorized as of December 31, 2021 and 2020, 374,083 and 367,183 issued and outstanding as of December 31, 2021 and 2020, respectively
|
| | | | 854,952 | | | | | | 851,851 | | |
Additional paid-in capital
|
| | | | 224,835 | | | | | | 223,499 | | |
Warrants
|
| | | | 952 | | | | | | 6,757 | | |
Accumulated other comprehensive income
|
| | | | 999 | | | | | | 1,014 | | |
Accumulated deficit
|
| | | | (856,248) | | | | | | (818,436) | | |
Non-controlling interest
|
| | | | 175 | | | | | | — | | |
TOTAL SHAREHOLDERS’ EQUITY
|
| | |
|
225,665
|
| | | |
|
264,685
|
| |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
| | | $ | 381,348 | | | | | $ | 402,074 | | |
| | |
2021
|
| |
2020
|
| ||||||
Revenues, net
|
| | | $ | 202,705 | | | | | $ | 158,409 | | |
Cost of goods sold
|
| | | | (152,502) | | | | | | (112,270) | | |
Gross profit
|
| | | | 50,203 | | | | | | 46,139 | | |
Operating expenses: | | | | | | | | | | | | | |
Wages and benefits
|
| | | | 17,407 | | | | | | 12,927 | | |
General and administrative
|
| | | | 19,073 | | | | | | 22,170 | | |
Sales and marketing
|
| | | | 1,457 | | | | | | 839 | | |
Share-based compensation
|
| | | | 3,804 | | | | | | 4,200 | | |
Depreciation and amortization
|
| | | | 17,857 | | | | | | 18,356 | | |
Impairment loss
|
| | | | 30,398 | | | | | | 23,941 | | |
Total operating expenses
|
| | | | 89,996 | | | | | | 82,433 | | |
Loss from operations
|
| | | | (39,793) | | | | | | (36,294) | | |
Other income (expense): | | | | | | | | | | | | | |
Interest income
|
| | | | 593 | | | | | | 3,835 | | |
Other income
|
| | | | 74 | | | | | | 1,053 | | |
Change in fair value of warrant liability
|
| | | | 6,001 | | | | | | — | | |
Gain on foreign currency exchange
|
| | | | 14 | | | | | | — | | |
Gain (loss) on sale of assets
|
| | | | 163 | | | | | | (70) | | |
Unrealized loss on investments
|
| | | | (891) | | | | | | (337) | | |
Loan receivable losses
|
| | | | (4,562) | | | | | | (16,416) | | |
Loss on termination of lease
|
| | | | (261) | | | | | | (613) | | |
Interest expense, net
|
| | | | (10,367) | | | | | | (9,390) | | |
Other expense
|
| | |
|
(9,236)
|
| | | |
|
(21,938)
|
| |
Loss from continuing operations before income taxes
|
| | |
|
(49,029)
|
| | | |
|
(58,232)
|
| |
Income taxes | | | | | | | | | | | | | |
Income tax benefit (expense)
|
| | | | 13,903 | | | | | | (1,696) | | |
Net loss from continuing operations, net of tax
|
| | |
|
(35,126)
|
| | | |
|
(59,928)
|
| |
Loss from discontinued operations before income taxes
|
| | | | — | | | | | | (58,257) | | |
Income tax benefit from discontinued operations
|
| | | | — | | | | | | 1,767 | | |
Net loss from discontinued operations, net of tax
|
| | | | — | | | | | | (56,490) | | |
Net loss
|
| | |
|
(35,126)
|
| | | |
|
(116,418)
|
| |
Other comprehensive (loss) income | | | | | | | | | | | | | |
Foreign currency translation adjustments
|
| | | | (15) | | | | | | 496 | | |
Comprehensive loss
|
| | | $ | (35,141) | | | | | $ | (115,922) | | |
Weighted average number of shares outstanding: | | | | | | | | | | | | | |
Basic
|
| | |
|
370,002,378
|
| | | |
|
364,562,929
|
| |
Net loss per common share | | | | | | | | | | | | | |
Basic and diluted
|
| | | $ | (0.09) | | | | | $ | (0.32) | | |
Basic and diluted, from continuing operations
|
| | | $ | (0.09) | | | | | $ | (0.16) | | |
Basic and diluted, from discontinued operations
|
| | | $ | — | | | | | $ | (0.15) | | |
| | |
Common Stock
|
| |
Additional
Paid in Capital |
| |
Warrants
|
| |
Accumulated Other
Comprehensive Income (Loss) |
| |
Accumulated
Deficit |
| |
Non-Controlling
Interest |
| |
Shareholders’
Equity Total |
| |||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||||||||||||
Balance – January 1, 2020
|
| | | | 362,279,572 | | | | | $ | 849,696 | | | | | $ | 210,160 | | | | | $ | 17,809 | | | | | $ | 518 | | | | | $ | (702,018) | | | | | $ | — | | | | | $ | 376,165 | | |
Options exercised
|
| | | | 62,100 | | | | | | 1 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1 | | |
Share-based compensation
|
| | | | 481,999 | | | | | | 175 | | | | | | 2,221 | | | | | | 66 | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,462 | | |
Warrants exercised
|
| | | | 100,857 | | | | | | — | | | | | | 27 | | | | | | (27) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Warrants expired
|
| | | | — | | | | | | — | | | | | | 11,091 | | | | | | (11,091) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Shares returned from escrow
|
| | | | (660,044) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Issuance and vesting of restricted share units
|
| | | | 4,918,189 | | | | | | 1,979 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,979 | | |
Comprehensive (loss) for the year
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 496 | | | | | | (116,418) | | | | | | — | | | | | | (115,922) | | |
Balance – December 31, 2020
|
| | | | 367,182,673 | | | | | $ | 851,851 | | | | | $ | 223,499 | | | | | $ | 6,757 | | | | | $ | 1,014 | | | | | $ | (818,436) | | | | | $ | — | | | | | $ | 264,685 | | |
Options exercised
|
| | | | 221,400 | | | | | | 13 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 13 | | |
Options forfeited
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Share-based compensation
|
| | | | — | | | | | | — | | | | | | 1,240 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,240 | | |
Warrants exercised
|
| | | | 657,000 | | | | | | 173 | | | | | | 96 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 269 | | |
Warrants expired
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Warrants reclassified to liability
|
| | | | — | | | | | | — | | | | | | — | | | | | | (5,805) | | | | | | | | | | | | (2,686) | | | | | | — | | | | | | (8,491) | | |
Shares returned from escrow
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Issuance and vesting of restricted share units
|
| | | | 5,272,310 | | | | | | 2,192 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,192 | | |
Shares reserved for contingent consideration
|
| | | | — | | | | | | 372 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 372 | | |
Formation of SFNY:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shares issued from formation of SFNY
|
| | | | 749,376 | | | | | | 351 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 351 | | |
Non-controlling interest
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 175 | | | | | | 175 | | |
Comprehensive (loss) for the year
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (15) | | | | | | (35,126) | | | | | | — | | | | | | (35,141) | | |
Balance – December 31, 2021
|
| | | | 374,082,759 | | | | | $ | 854,952 | | | | | $ | 224,835 | | | | | $ | 952 | | | | | $ | 999 | | | | | $ | (856,248) | | | | | $ | 175 | | | | | $ | 225,665 | | |
| | |
2021
|
| |
2020
|
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (35,126) | | | | | $ | (116,418) | | |
Adjustments to reconcile net loss to net cash provided by operating activities:
|
| | | | | | | | | | | | |
Loss on sale of discontinued operation, net of tax
|
| | | | — | | | | | | 56,787 | | |
Unrealized loss on investments
|
| | | | 891 | | | | | | 337 | | |
Gain (Loss) on disposal of property
|
| | | | — | | | | | | 70 | | |
Loss on termination of lease
|
| | | | 210 | | | | | | 418 | | |
Depreciation and amortization
|
| | | | 22,438 | | | | | | 20,393 | | |
Amortization of operating lease right of use assets
|
| | | | 1,231 | | | | | | 1,602 | | |
Change in allowance for doubtful accounts
|
| | | | (188) | | | | | | 757 | | |
Non-cash interest income
|
| | | | (500) | | | | | | (3,740) | | |
Deferred tax benefit
|
| | | | (13,864) | | | | | | (975) | | |
Share-based compensation
|
| | | | 3,804 | | | | | | 4,200 | | |
Accretion of debt discount
|
| | | | 2,667 | | | | | | 2,227 | | |
Accounts receivable write off
|
| | | | — | | | | | | 2,169 | | |
Loan receivable losses
|
| | | | 4,562 | | | | | | 16,416 | | |
Impairment loss
|
| | | | 30,398 | | | | | | 23,941 | | |
Warrants and severance
|
| | | | — | | | | | | 66 | | |
Change in fair value of derivatives
|
| | | | (6,001) | | | | | | — | | |
Non-cash interest expense
|
| | | | 4,050 | | | | | | 3,669 | | |
Net change in working capital items:
|
| | | | | | | | | | | | |
Trade receivables and others, net
|
| | | | (17,627) | | | | | | (405) | | |
Inventories
|
| | | | (22,574) | | | | | | 5,204 | | |
Prepaid expenses and other current assets
|
| | | | 1,340 | | | | | | 797 | | |
Accounts payable and accrued liabilities
|
| | | | 18,239 | | | | | | (2,695) | | |
Income tax payable
|
| | | | (903) | | | | | | 903 | | |
Operating lease liability
|
| | | | (512) | | | | | | 859 | | |
Deferred revenue
|
| | | | (1,134) | | | | | | 1,218 | | |
Cash (used in) provided by operating activities – continuing operations
|
| | | | (8,599) | | | | | | 17,800 | | |
Cash used in operating activities – discontinuing operations
|
| | | | — | | | | | | (7,140) | | |
Net cash (used in) provided by operating activities
|
| | |
|
(8,599)
|
| | | |
|
10,660
|
| |
Cash flows from investing activities: | | | | | | | | | |||||
Purchases of property, plant and equipment
|
| | | | (3,064) | | | | | | (1,908) | | |
Proceeds from sale of property
|
| | | | 1,233 | | | | | | 138 | | |
Net repayment (advances) on loan receivables
|
| | | | 2,417 | | | | | | (808) | | |
Cash paid for acquisitions
|
| | | | (400) | | | | | | — | | |
Cash provided by (used in) investing activities – continuing operations
|
| | | | 186 | | | | | | (2,578) | | |
Cash provided by investing activities – discontinuing operations
|
| | | | — | | | | | | 58 | | |
| | |
2021
|
| |
2020
|
| ||||||
Net cash provided by (used in) investing activities
|
| | |
|
186
|
| | | |
|
(2,520)
|
| |
Cash flows from financing activities:
|
| | | | | | | | | | | | |
Payments on lease liability
|
| | | | (2,311) | | | | | | (2,392) | | |
Principal payments on notes payable
|
| | | | (47,973) | | | | | | (516) | | |
Debt issuance costs
|
| | | | (469) | | | | | | — | | |
Proceeds from notes payable
|
| | | | 57,081 | | | | | | — | | |
Proceeds from options and warrants exercised
|
| | | | 186 | | | | | | 1 | | |
Cash provided by (used in) financing activities – continuing operations
|
| | | | 6,514 | | | | | | (2,907) | | |
Cash used in financing activities – discontinuing operations
|
| | | | — | | | | | | (1,002) | | |
Net cash provided by (used in) financing activities
|
| | | | 6,514 | | | | | | (3,909) | | |
Effect of foreign exchange on cash and cash equivalents
|
| | | | (8) | | | | | | 616 | | |
Net change in cash and cash equivalents
|
| | | | (1,907) | | | | | | 4,847 | | |
Cash and cash equivalents, beginning of year
|
| | | | 8,859 | | | | | | 4,012 | | |
Cash and cash equivalents, end of year
|
| | | $ | 6,952 | | | | | $ | 8,859 | | |
Other non-cash investing and financing activities | | | | | | | | | | | | | |
Conversion of loans receivable to investment
|
| | | $ | 6,400 | | | | | $ | (526) | | |
Shares issued for Standard Farms New York Acquisition
|
| | | $ | 351 | | | | | $ | — | | |
Extinguishment of debt for Standard Farms Ohio, LLC acquisition
|
| | | $ | 7,550 | | | | | $ | — | | |
Extinguishment of existing liabilities from Sante Veritas Therapeutics sale
|
| | | $ | 825 | | | | | $ | — | | |
Property and equipment acquired via finance lease
|
| | | $ | 832 | | | | | $ | — | | |
Property and equipment acquired via operating lease
|
| | | $ | 139 | | | | | $ | 88 | | |
|
Major subsidiaries
|
| |
Place of Incorporation
|
| |
Ownership
Percentage |
| |||
Jimmy Jang Holdings Inc.
|
| |
British Columbia
|
| | | | 100% | | |
Jimmy Jang, L.P.(i)
|
| | Delaware | | | | | 100% | | |
Jupiter Research, LLC
|
| | Arizona | | | | | 100% | | |
Baker Technologies Inc.
|
| | Delaware | | | | | 100% | | |
Standard Farms, LLC
|
| | Pennsylvania | | | | | 100% | | |
Standard Farms Ohio, LLC
|
| | Ohio | | | | | 100% | | |
Sea Hunter, Therapeutics, LLC
|
| | Delaware | | | | | 100% | | |
Commonwealth Alternative Care, Inc.
|
| | Massachusetts | | | | | 100% | | |
SFNY Holdings, Inc.
|
| | Delaware | | | | | 100% | | |
CGSF Group, LLC
|
| | Delaware | | | | | 75% | | |
|
Machinery and equipment
|
| | 3 – 10 years | |
|
Furniture and fixtures
|
| | 3 – 7 years | |
|
Autos and trucks
|
| | 5 years | |
|
Buildings, leasehold and land improvements
|
| | 5 – 40 years | |
|
Greenhouse-agricultural structure
|
| | 7 – 15 years | |
|
Construction in progress
|
| |
Not depreciated
|
|
|
Property not in service
|
| |
Not depreciated
|
|
|
Customer relationships
|
| | 10 – 13 years | |
| Trademarks | | | 7 – 10 years | |
|
License rights(1)
|
| | 9 – 15 years | |
|
Management agreements
|
| |
Over the term of agreement
|
|
|
Patents and technologies
|
| | 10 years | |
| Software | | | 7 – 10 years | |
|
Backlog and non-competition agreements
|
| | 4 years | |
| Consideration: | | | | | | | |
|
Settlement of pre-existing advance for acquisition target
|
| | | $ | 7,550 | | |
|
Fair value of consideration exchanged
|
| | | $ | 7,550 | | |
| Recognized amounts of identifiable assets acquired and liabilities assumed: | | | | | | | |
|
Cash and cash equivalents
|
| | | $ | 21 | | |
|
Trade receivables
|
| | | | 10 | | |
|
Inventory
|
| | | | 502 | | |
|
Prepaid expenses and other current assets
|
| | | | 29 | | |
|
Property, plant and equipment
|
| | | | 1,935 | | |
|
Intangible assets:
|
| | | | | | |
|
License
|
| | | | 3,890 | | |
|
Right-of-use assets
|
| | | | 120 | | |
|
Goodwill
|
| | | | 1,380 | | |
|
Accounts payable and accrued liabilities
|
| | | | (204) | | |
|
Lease liabilities
|
| | | | (133) | | |
|
Total net assets acquired
|
| | | $ | 7,550 | | |
| Consideration: | | | | | | | |
|
Cash and cash equivalents
|
| | | $ | 400 | | |
|
Shares issued upon issuance
|
| | | | 351 | | |
|
Fair value of consideration exchanged
|
| | | $ | 751 | | |
|
Non-controlling interest
|
| | | $ | 175 | | |
| Recognized amounts of identifiable assets acquired and liabilities assumed: | | | | | | | |
|
Intangible assets:
|
| | | | | | |
|
Management agreement
|
| | | $ | 926 | | |
|
Total net assets acquired
|
| | | $ | 926 | | |
| Carrying value of net assets sold: | | | | | | | |
|
Cash and cash equivalents
|
| | | $ | 31 | | |
|
Trade receivables and others, net
|
| | | | 768 | | |
|
Prepaid expenses and other current assets
|
| | | | 90 | | |
|
Property, plant and equipment, net
|
| | | | 298 | | |
|
Right-of-use assets
|
| | | | 1,721 | | |
|
Intangible assets, net
|
| | | | 27,410 | | |
|
Loans receivable, long-term
|
| | | | 58 | | |
|
Goodwill
|
| | | | 30,505 | | |
|
Accounts payable and accrued liabilities
|
| | | | (4,879) | | |
|
Lease liability
|
| | | | (1,796) | | |
|
Deferred tax liability
|
| | | | (179) | | |
| | | | | | 54,027 | | |
| Sale consideration on disposition of net assets: | | | | | | | |
|
Fair value of convertible senior promissory note (Note 10)
|
| | | | 6,518 | | |
|
Cost to sell
|
| | | | (485) | | |
| | | | | | 6,033 | | |
|
Loss on sale of discontinued operations
|
| | | | 47,994 | | |
|
Loss from discontinued operations
|
| | | | 10,263 | | |
|
Tax recovery on loss on sale of discontinued operations
|
| | | | (1,767) | | |
|
Loss from sale of discontinued operations, net of tax
|
| | | | 56,490 | | |
|
|
Revenues, net
|
| | | $ | 6,246 | | |
|
Cost of goods sold
|
| | | | (6,593) | | |
|
Gross profit
|
| | | | (347) | | |
| Operating expenses: | | | | | | | |
|
Depreciation and amortization
|
| | | | 1,327 | | |
|
Wages and benefits
|
| | | | 5,755 | | |
|
Professional fees
|
| | | | 57 | | |
|
Rent
|
| | | | 218 | | |
|
Insurance
|
| | | | 29 | | |
|
Advertising and marketing
|
| | | | 54 | | |
|
Travel
|
| | | | 21 | | |
|
General and administrative
|
| | | | 1,369 | | |
|
Loss on sale of assets
|
| | | | 44 | | |
|
Finance expense
|
| | | | 129 | | |
|
Total operating expenses
|
| | | | 9,003 | | |
|
(Loss) from operations
|
| | | | (9,350) | | |
| Other income (expense): | | | | | | | |
|
Other expense
|
| | | | (913) | | |
|
Total other income (expense)
|
| | | | (913) | | |
|
(Loss) from discontinued operations
|
| | | | (10,263) | | |
| Income taxes | | | | | | | |
|
Recovery of (provision for) income taxes
|
| | | | 1,767 | | |
|
Net (loss) from discontinued operations
|
| | | | (8,496) | | |
|
(Loss) on sale of discontinued operations
|
| | | | (47,994) | | |
|
Net (loss) from operating activities, net of tax
|
| | | $ | (56,490) | | |
| | |
Years ended
|
| |||||||||
Inventory
|
| |
December 31,
2021 |
| |
December 31,
2020 |
| ||||||
Raw material – cannabis plants
|
| | | $ | 3,206 | | | | | $ | 2,143 | | |
Raw material – other materials
|
| | | | 1,116 | | | | | | 580 | | |
Work in progress
|
| | | | 6,327 | | | | | | 3,488 | | |
Finished goods
|
| | | | 43,776 | | | | | | 25,680 | | |
Supplies and accessories
|
| | | | 1,158 | | | | | | 616 | | |
Total inventory
|
| | | $ | 55,583 | | | | | $ | 32,507 | | |
| | |
Years ended December 31,
|
| |||||||||
Property, plant and equipment
|
| |
2021
|
| |
2020
|
| ||||||
Land
|
| | | $ | 169 | | | | | $ | 169 | | |
Land improvements
|
| | | | 460 | | | | | | 460 | | |
Machinery & equipment
|
| | | | 12,450 | | | | | | 11,368 | | |
Furniture & fixtures
|
| | | | 788 | | | | | | 949 | | |
Buildings
|
| | | | 6,845 | | | | | | 6,591 | | |
Greenhouse-agricultural structure
|
| | | | 8,195 | | | | | | 8,192 | | |
Leasehold improvements
|
| | | | 46,587 | | | | | | 39,662 | | |
Construction in progress
|
| | | | 3,391 | | | | | | 6,936 | | |
Autos & trucks
|
| | | | 214 | | | | | | 192 | | |
Property held for sale
|
| | | | — | | | | | | 1,713 | | |
Total cost
|
| | | | 79,099 | | | | | | 76,232 | | |
Less: accumulated depreciation
|
| | | | (16,739) | | | | | | (9,437) | | |
Total property, plant and equipment
|
| | | $ | 62,360 | | | | | $ | 66,795 | | |
| | |
Years ended
|
| |||||||||
Investments
|
| |
December 31,
2021 |
| |
December 31,
2020 |
| ||||||
Investment in HERBL, Inc.
|
| | | $ | 6,400 | | | | | $ | — | | |
Investment in Big Toe Ventures LLC
|
| | | | 196 | | | | | | 1,000 | | |
Investment in Akerna
|
| | | | 102 | | | | | | 189 | | |
Total Investments
|
| | | $ | 6,698 | | | | | $ | 1,189 | | |
Intangible assets
|
| |
Net Balance
12/31/2020 |
| |
Business
acquisitions |
| |
Amortization
Expense |
| |
Impairment
|
| |
Net Balance
12/31/2021 |
| |||||||||||||||
Customer relationships
|
| | | $ | 71,905 | | | | | $ | — | | | | | $ | (6,698) | | | | | $ | — | | | | | $ | 65,207 | | |
Trademarks
|
| | | | 23,106 | | | | | | — | | | | | | (2,947) | | | | | | — | | | | | | 20,159 | | |
License rights
|
| | | | 14,000 | | | | | | 3,890 | | | | | | (19) | | | | | | (35) | | | | | | 17,836 | | |
Management agreements
|
| | | | — | | | | | | 926 | | | | | | (43) | | | | | | — | | | | | | 883 | | |
Patents & technologies
|
| | | | 26,320 | | | | | | — | | | | | | (3,290) | | | | | | — | | | | | | 23,030 | | |
Backlog and non-competition agreements
|
| | | | 3,306 | | | | | | — | | | | | | (1,651) | | | | | | — | | | | | | 1,655 | | |
Total intangible assets
|
| | | $ | 138,637 | | | | | $ | 4,816 | | | | | $ | (14,648) | | | | | $ | (35) | | | | | $ | 128,770 | | |
Intangible assets
|
| |
Net Balance
12/31/2019 |
| |
Amortization
Expense |
| |
Impairment
|
| |
Discontinued
operations |
| |
Net Balance
12/31/2020 |
| |||||||||||||||
Customer relationships
|
| | | $ | 85,469 | | | | | $ | (7,660) | | | | | $ | (1,458) | | | | | $ | (4,446) | | | | | $ | 71,905 | | |
Trademarks
|
| | | | 27,196 | | | | | | (3,082) | | | | | | (281) | | | | | | (727) | | | | | | 23,106 | | |
License rights
|
| | | | 34,970 | | | | | | (26) | | | | | | — | | | | | | (20,944) | | | | | | 14,000 | | |
Management agreements
|
| | | | 2,460 | | | | | | — | | | | | | (2,460) | | | | | | — | | | | | | — | | |
Patents & technologies
|
| | | | 29,610 | | | | | | (3,290) | | | | | | — | | | | | | — | | | | | | 26,320 | | |
Software
|
| | | | 2,028 | | | | | | (243) | | | | | | (492) | | | | | | (1,293) | | | | | | — | | |
Backlog and non-competition agreements
|
| | | | 4,957 | | | | | | (1,651) | | | | | | — | | | | | | — | | | | | | 3,306 | | |
Total intangible assets
|
| | | $ | 186,690 | | | | | $ | (15,952) | | | | | $ | (4,691) | | | | | $ | (27,410) | | | | | $ | 138,637 | | |
Year ended December 31,
|
| |
Estimated
amortization |
| |||
2022
|
| | | $ | 14,706 | | |
2023
|
| | | | 13,056 | | |
2024
|
| | | | 13,056 | | |
2025
|
| | | | 13,056 | | |
2026
|
| | | | 12,899 | | |
Thereafter
|
| | | | 44,268 | | |
Total | | | | $ | 111,041 | | |
Goodwill
|
| |
Baker
|
| |
Blackbird
|
| |
Jupiter
|
| |
Standard
Farms |
| |
Standard
Farms OH |
| |
Total
|
| ||||||||||||||||||
Balance, December 31, 2019
|
| | | $ | 3,752 | | | | | $ | 30,505 | | | | | $ | 93,786 | | | | | $ | 10,306 | | | | | $ | — | | | | | $ | 138,349 | | |
Impairment
|
| | | | (3,752) | | | | | | — | | | | | | (5,399) | | | | | | — | | | | | | — | | | | | | (9,151) | | |
Discontinued operations
|
| | | | — | | | | | | (30,505) | | | | | | — | | | | | | — | | | | | | — | | | | | | (30,505) | | |
Balance, December 31, 2020
|
| | | $ | — | | | | | $ | — | | | | | $ | 88,387 | | | | | $ | 10,306 | | | | | $ | — | | | | | $ | 98,693 | | |
Business acquisitions
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,380 | | | | | | 1,380 | | |
Impairment
|
| | | | — | | | | | | — | | | | | | (25,040) | | | | | | (4,488) | | | | | | — | | | | | | (29,528) | | |
Balance, December 31, 2021
|
| | | $ | — | | | | | $ | — | | | | | $ | 63,347 | | | | | $ | 5,818 | | | | | $ | 1,380 | | | | | $ | 70,545 | | |
| | |
Jupiter
reporting unit |
| |
Standard Farms
reporting unit |
| ||||||
Balance, December 31, 2021 | | | | | | | | | | | | | |
Terminal value growth rate
|
| | | | 3.0% | | | | | | 3.0% | | |
Discount rate
|
| | | | 24.7% | | | | | | 31.5% | | |
Projected revenue growth rate*
|
| | | | 20.2% | | | | | | 33.6% | | |
Fair value less cost to dispose
|
| | | $ | 177,733 | | | | | $ | 38,917 | | |
| | |
Jupiter
reporting unit |
| |
Standard Farms
reporting unit |
| ||||||
Balance, December 31, 2020 | | | | | | | | | | | | | |
Terminal value growth rate
|
| | | | 3.0% | | | | | | 3.0% | | |
Discount rate
|
| | | | 22.5% | | | | | | 21.2% | | |
Projected revenue growth rate*
|
| | | | 24.6% | | | | | | 30.8% | | |
Fair value less cost to dispose
|
| | | $ | 194,361 | | | | | $ | 56,412 | | |
Accumulated impairment
|
| |
Total
|
| |||
Beginning balance, January 1, 2020
|
| | | $ | 498 | | |
Impairment recognized during the year
|
| | | | 9,151 | | |
Closing balance, December 31, 2020
|
| | | $ | 9,649 | | |
Impairment recognized during the year
|
| | | | 29,528 | | |
Closing balance, December 31, 2021
|
| | | $ | 39,177 | | |
Loans receivable
|
| |
December 31,
2021 |
| |
December 31,
2020 |
| ||||||
Teneo Fund SPVi LLC note
|
| | | $ | 5,911 | | | | | $ | 20,541 | | |
Blackbird note (FVTPL)
|
| | | | — | | | | | | 7,128 | | |
Verdant note
|
| | | | — | | | | | | 2,182 | | |
Medical 420 note
|
| | | | 1,410 | | | | | | 1,410 | | |
A&R note
|
| | | | 714 | | | | | | 1,250 | | |
SSZ and Elev8 note
|
| | | | 1,002 | | | | | | 968 | | |
Pure Hana Synergy note
|
| | | | 224 | | | | | | 224 | | |
IESO note
|
| | | | — | | | | | | 161 | | |
Little beach note
|
| | | | 423 | | | | | | — | | |
Total loans receivable
|
| | | | 9,684 | | | | | | 33,864 | | |
Less allowance for expected credit losses
|
| | | | (5,559) | | | | | | (16,721) | | |
Loans receivable, net of expected credit losses
|
| | | | 4,125 | | | | | | 17,143 | | |
Less current portion of loan receivable
|
| | | | (2,453) | | | | | | (2,660) | | |
Loans receivable, long-term
|
| | | $ | 1,672 | | | | | $ | 14,483 | | |
| | |
Years ended
|
| |||||||||
Accounts payable and accrued liabilities
|
| |
December 31,
2021 |
| |
December 31,
2020 |
| ||||||
Accounts Payable
|
| | | $ | 31,979 | | | | | $ | 18,416 | | |
Other Accrued Expenses
|
| | | | 5,746 | | | | | | 5,749 | | |
Accrued Accounts Payable
|
| | | | 5,798 | | | | | | 2,742 | | |
Accrued Interest Expense
|
| | | | 2,752 | | | | | | 2,150 | | |
Accrued Payroll
|
| | | | 2,951 | | | | | | 1,982 | | |
Other Current Payables/Liabilities
|
| | | | 254 | | | | | | 34 | | |
Credit Card Payable
|
| | | | 2 | | | | | | 13 | | |
Total accounts payable and accrued liabilities
|
| | | $ | 49,482 | | | | | $ | 31,086 | | |
| | |
Years ended
|
| |||||||||
Notes payable
|
| |
December 31,
2021 |
| |
December 31,
2020 |
| ||||||
Balance, beginning of year
|
| | | $ | 71,750 | | | | | $ | 65,710 | | |
Proceeds from borrowing
|
| | | | 57,081 | | | | | | — | | |
Accretion of debt discount
|
| | | | 2,667 | | | | | | 2,227 | | |
Repayment of borrowings
|
| | | | (47,973) | | | | | | (516) | | |
Transaction costs related to notes issued
|
| | | | (469) | | | | | | — | | |
Proceeds allocated to warrants
|
| | | | — | | | | | | — | | |
Interest expense
|
| | | | 6,461 | | | | | | 6,994 | | |
Interest paid
|
| | | | (2,904) | | | | | | (2,665) | | |
Notes payable, end of year
|
| | | | 86,613 | | | | | | 71,750 | | |
Less current portion
|
| | | | (40,758) | | | | | | (4,668) | | |
Notes payable, long-term
|
| | | $ | 45,855 | | | | | $ | 67,082 | | |
Year ended December 31,
|
| |
Amount
|
| |||
2022
|
| | | $ | 40,758 | | |
2023
|
| | | | 45,855 | | |
Total | | | | $ | 86,613 | | |
Years ended December 31,
|
| |
2021
|
| |
2020
|
| ||||||
Operating lease cost
|
| | | $ | 1,231 | | | | | $ | 1,062 | | |
Finance lease cost: | | | | | | | | | | | | | |
Amortization of lease assets
|
| | | | 971 | | | | | | 1,472 | | |
Interest on lease liabilities
|
| | | | 493 | | | | | | 611 | | |
Finance lease costs
|
| | | | 1,464 | | | | | | 2,083 | | |
Total lease cost
|
| | | $ | 2,695 | | | | | $ | 3,145 | | |
Year ended December 31,
|
| |
Finance
|
| |
Operating
|
| ||||||
2022
|
| | | $ | 1,414 | | | | | $ | 1,149 | | |
2023
|
| | | | 1,452 | | | | | | 1,180 | | |
2024
|
| | | | 1,489 | | | | | | 1,197 | | |
2025
|
| | | | 1,212 | | | | | | 1,213 | | |
2026
|
| | | | 926 | | | | | | 1,111 | | |
Thereafter
|
| | | | 1,295 | | | | | | 1,294 | | |
Total undiscounted lease liabilites
|
| | | | 7,788 | | | | | | 7,144 | | |
Interest on lease liabilities
|
| | | | (1,514) | | | | | | (1,486) | | |
Total present value of minimum lease payments
|
| | | | 6,274 | | | | | | 5,658 | | |
Lease liability – current portion
|
| | | | (955) | | | | | | (731) | | |
Lease liability
|
| | | $ | 5,319 | | | | | $ | 4,927 | | |
Warrants
|
| | | | | | | |
Weighted Average
Exercise Price ($C) |
| |||
Balance as of December 31, 2019
|
| | | | 76,042,967 | | | | | $ | 2.29 | | |
Exercised
|
| | | | (182,500) | | | | | | 0.33 | | |
Issued
|
| | | | 500,000 | | | | | | 0.33 | | |
Warrants
|
| | | | | | | |
Weighted Average
Exercise Price ($C) |
| |||
Expiration of warrants
|
| | | | (1,798,256) | | | | | | 5.25 | | |
Balance as of December 31, 2020
|
| | | | 74,562,211 | | | | | $ | 0.43 | | |
Exercised
|
| | | | (657,000) | | | | | | 0.33 | | |
Balance as of December 31, 2021
|
| | | | 73,905,211 | | | | | $ | 0.44 | | |
|
Security issued
|
| |
Exercise
price (C$) |
| |
Number of
warrants |
| |
Expiration date
|
| ||||||
Warrants issued as part of debt offering
|
| | | | 0.33 | | | | | | 45,249,520 | | | |
November 1, 2022
|
|
Warrants issued as part of debt offering
|
| | | | 0.39 | | | | | | 18,360,000 | | | |
November 20, 2022
|
|
Consultant warrants
|
| | | | 0.53 | | | | | | 750,000 | | | |
November 22, 2022
|
|
Consultant warrants
|
| | | | 0.33 | | | | | | 500,000 | | | |
January 28, 2023
|
|
Founders separation warrants
|
| | | | 1.05 | | | | | | 9,045,691 | | | |
September 30, 2024
|
|
| | | | | | | | | | | 73,905,211 | | | | | |
|
Exercise price
|
| |
$0.25 – 0.79
|
|
|
Expected dividend yield
|
| |
0%
|
|
|
Risk free interest rate
|
| |
1.55% – 1.62%
|
|
|
Expected life in years
|
| |
2.50 – 3.00
|
|
|
Expected volatility
|
| |
80% – 90%
|
|
| | |
Number of
Restricted Stock Units |
| |
Weighted Average
Grant Date Fair Value |
| ||||||
Unvested as of January 1, 2020
|
| | | | 6,374,246 | | | | | $ | 0.40 | | |
Issued
|
| | | | 1,024,104 | | | | | | 0.29 | | |
Forfeited
|
| | | | — | | | | | | — | | |
Vested
|
| | | | (3,899,246) | | | | | | 0.39 | | |
Unvested as of December 31, 2020
|
| | | | 3,499,104 | | | | | $ | 0.38 | | |
Issued
|
| | | | 5,978,269 | | | | | | 0.38 | | |
Forfeited
|
| | | | (577,942) | | | | | | 0.39 | | |
Vested
|
| | | | (5,272,350) | | | | | | 0.38 | | |
Unvested as of December 31, 2021
|
| | | | 3,627,081 | | | | | $ | 0.37 | | |
Share options
|
| |
Stock options
common shares |
| |
Weighted-
average exercise price |
| |
Weighted-average
remaining contractual life (yrs) |
| ||||||
Balance as of December 31, 2019
|
| | | | 12,525,614 | | | |
US$1.35
|
| | | | 4.66 | | |
Granted
|
| | | | 17,837,463 | | | |
US$0.62
|
| | | | 5.49 | | |
Exercised
|
| | | | (62,100) | | | |
US$0.09
|
| | | | — | | |
Forfeited
|
| | | | (11,159,789) | | | |
US$1.14
|
| | | | 0.55 | | |
Balance as of December 31, 2020
|
| | | | 19,141,188 | | | |
US$0.63
|
| | | | 6.61 | | |
Share options
|
| |
Stock options
common shares |
| |
Weighted-
average exercise price |
| |
Weighted-average
remaining contractual life (yrs) |
| ||||||
Granted
|
| | | | 250,000 | | | |
US$0.49
|
| | | | 0.46 | | |
Exercised
|
| | | | (221,400) | | | |
US$0.06
|
| | | | 0.03 | | |
Forfeited
|
| | | | (2,596,408) | | | |
US$0.53
|
| | | | — | | |
Balance as of December 31, 2021
|
| | | | 16,573,380 | | | |
US$0.63
|
| | | | 5.42 | | |
|
Security issuable
|
| |
Number of
options |
| |
Exercise
price |
| |
Expiration date
|
| |
Options
exercisable |
| ||||||
| | | | | | | | | | | |
February 22, 2022 –
|
| | | | | | |
Legacy employees
|
| | | | 1,754,600 | | | |
US$0.32 – 1.58
|
| |
June 28, 2028
|
| | | | 1,754,600 | | |
2020 employee grant
|
| | | | 9,123,350 | | | |
US$0.30 – 0.48
|
| |
February 28, 2022 –
|
| | | | 3,599,573 | | |
| | | | | | | | | | | |
December 1, 2030
|
| | | | | | |
| | | | | | | | | | | |
February 22, 2022 –
|
| | | | | | |
Other employee grants
|
| | | | 5,695,430 | | | |
US$0.41 – 3.96
|
| |
November 21, 2029
|
| | | | 5,695,430 | | |
Total | | | | | 16,573,380 | | | | | | | | | | | | 11,049,603 | | |
|
Risk free interest rate
|
| |
0.06% – 2.66%
|
|
|
Expected dividend yield
|
| |
0%
|
|
|
Expected volatility
|
| |
63.06% – 166.66%
|
|
|
Expected life in years
|
| |
1.00 – 10.00
|
|
|
Forfeiture rate
|
| |
0%
|
|
| | |
Number of
Performance Stock Units |
| |
Weighted Average
Grant Date Fair Value |
| ||||||
Unvested as of January 1, 2021
|
| | | | — | | | | | $ | — | | |
Issued
|
| | | | 11,843,156 | | | | | | 0.31 | | |
Forfeited
|
| | | | (38,658) | | | | | | 0.21 | | |
Vested
|
| | | | — | | | | | | — | | |
Unvested as of December 31, 2021
|
| | | | 11,804,498 | | | | | $ | 0.31 | | |
PSU Grant Dates
|
| |
Close Price on
Grant Date |
| |
Expiration Date
|
| |
Outstanding (#)
|
| ||||||
June 18th, 2021
|
| | | $ | 0.4941 | | | |
December 31, 2024
|
| | | | 7,487,351 | | |
September 30th, 2021
|
| | | $ | 0.3875 | | | |
December 31, 2024
|
| | | | 2,367,772 | | |
December 19th, 2021
|
| | | $ | 0.2263 | | | |
December 31, 2024
|
| | | | 549,375 | | |
Total | | | | | | | | | | | | | | 10,404,498 | | |
Weighted Average 2021 PSU Valuation Inputs
|
| ||||||
Risk-Free Interest Rate
|
| | | | 0.59% | | |
Dividend Yield
|
| | | | 0.00% | | |
Expected Stock Price Volatility
|
| | | | 104.67% | | |
Expected Life of Awards (Years)
|
| | | | 3.45 | | |
Weighted Average Fair Value
|
| | | $ | 0.28 | | |
| | |
Years ended
|
| |||||||||
Loss per share
|
| |
December 31,
2021 |
| |
December 31,
2020 |
| ||||||
Net loss
|
| | | $ | (35,126) | | | | | $ | (116,418) | | |
Weighted-average number of shares and units outstanding – basic
|
| | | | 370,002,378 | | | | | | 364,562,929 | | |
Loss per share – basic and diluted
|
| | | $ | (0.09) | | | | | $ | (0.32) | | |
Loss per share – basic and diluted, from continuing operations
|
| | | $ | (0.09) | | | | | $ | (0.16) | | |
Loss per share, from discontinued operations
|
| | | $ | — | | | | | $ | (0.15) | | |
Income tax provision
|
| |
December 31,
2021 |
| |
December 31,
2020 |
| ||||||
Current: | | | | | | | | | | | | | |
US Federal
|
| | | $ | (39) | | | | | $ | — | | |
US State
|
| | | | — | | | | | | — | | |
Foreign
|
| | | | — | | | | | | 903 | | |
Deferred | | | | | | | | | | | | | |
US Federal
|
| | | | (9,236) | | | | | | (2,202) | | |
US State
|
| | | | (4,628) | | | | | | 2,995 | | |
Foreign
|
| | | | — | | | | | | — | | |
(Recovery of) provision for income taxes
|
| | | $ | (13,903) | | | | | $ | 1,696 | | |
Income tax provision
|
| |
December 31,
2021 |
| |
December 31,
2020 |
| ||||||
(Loss) from continuing operations before income taxes
|
| | | $ | (49,029) | | | | | $ | (58,232) | | |
| | | | | 21% | | | | | | 22% | | |
Pre-tax (loss) at statutory rate from continuing operations
|
| | | | (10,356) | | | | | | (12,562) | | |
U.S. State and local taxes
|
| | | | (1,024) | | | | | | (2,501) | | |
IRC Section 280E
|
| | | | 4,133 | | | | | | 4,646 | | |
Goodwill impairment
|
| | | | 2,198 | | | | | | 4,472 | | |
Other impairment
|
| | | | (2,866) | | | | | | — | | |
Change in fair value of warrants
|
| | | | (1,506) | | | | | | — | | |
Stock based compensation
|
| | | | 888 | | | | | | 1,113 | | |
Change in valuation allowance
|
| | | | 1,022 | | | | | | 68 | | |
Return to provision and other
|
| | | | 1,080 | | | | | | 2,702 | | |
Tax rate changes
|
| | | | (7,492) | | | | | | 3,748 | | |
Other
|
| | | | 21 | | | | | | 10 | | |
(Recovery of) provision for income taxes
|
| | | $ | (13,903) | | | | | $ | 1,696 | | |
Deferred tax asset (liability)
|
| |
December 31,
2021 |
| |
December 31,
2020 |
| ||||||
Allowance for doubtful accounts
|
| | | $ | 1,287 | | | | | $ | 4,293 | | |
Lease liabilities
|
| | | | 960 | | | | | | 483 | | |
Acquisition costs
|
| | | | 697 | | | | | | 587 | | |
Fixed assets
|
| | | | (4,264) | | | | | | 2,914 | | |
Accrued payroll
|
| | | | 361 | | | | | | 486 | | |
Other
|
| | | | 290 | | | | | | 277 | | |
Interest expense carryforward
|
| | | | 5,023 | | | | | | 1,944 | | |
Net operating loss carryforwards
|
| | | | 24,436 | | | | | | 16,334 | | |
Capital loss carryforwards
|
| | | | 9,177 | | | | | | 7,603 | | |
Valuation allowance
|
| | | | (29,368) | | | | | | (22,591) | | |
Deferred tax asset recognized
|
| | | | 8,599 | | | | | | 12,330 | | |
Intangible assets
|
| | | | (5,893) | | | | | | (22,571) | | |
Goodwill
|
| | | | (228) | | | | | | (588) | | |
Investment in subsidiary
|
| | | | (2,708) | | | | | | (2,676) | | |
Right of use asset
|
| | | | 274 | | | | | | (335) | | |
Other
|
| | | | (128) | | | | | | (109) | | |
Net deferred tax liability
|
| | | $ | (85) | | | | | $ | (13,949) | | |
Year ended December 31,
|
| |
Amount
|
| |||
2022
|
| | | $ | 434 | | |
2023
|
| | | | 450 | | |
2024
|
| | | | 463 | | |
2025
|
| | | | 477 | | |
2026 and thereafter
|
| | | | 1,520 | | |
Total | | | | $ | 3,344 | | |
| | | | | | | | |
Contractual cash flows
|
| |||||||||||||||||||||
December 31, 2021
|
| |
Carrying amount
|
| |
Total
|
| |
< 6 months
|
| |
6 – 12 months
|
| |
1 – 5 years
|
| |||||||||||||||
Accounts payable and accrued
liabilities |
| | | $ | 49,482 | | | | | $ | (49,482) | | | | | | (40,208) | | | | | | (189) | | | | | | (9,085) | | |
Notes payable
|
| | | | 86,613 | | | | | | (87,105) | | | | | | (10,704) | | | | | | (38,629) | | | | | | (37,772) | | |
Total | | | | $ | 136,095 | | | | | $ | (136,587) | | | | | $ | (50,912) | | | | | $ | (38,818) | | | | | $ | (46,857) | | |
| | |
Year ended December 31, 2021
|
| |||||||||||||||
Nature of collateral
|
| |
Gross amounts
|
| |
Loan losses
|
| |
Net
|
| |||||||||
Security interest in assets of counterparty
|
| | | $ | 8,050 | | | | | $ | (4,556) | | | | |
$
|
3,494
|
| |
Third party guarantee
|
| | | | 1,410 | | | | | | (882) | | | | |
|
528
|
| |
No collateral
|
| | | | 224 | | | | | | (121) | | | | |
|
103
|
| |
Net loans receivable
|
| | | $ | 9,684 | | | | | $ | (5,559) | | | | | $ | 4,125 | | |
| | |
Year ended December 31, 2020
|
| |||||||||||||||
Nature of collateral
|
| |
Gross amounts
|
| |
Loan losses
|
| |
Net
|
| |||||||||
Security interest in assets of counterparty
|
| | | $ | 32,069 | | | | | $ | (15,563) | | | | |
$
|
16,506
|
| |
Third party guarantee
|
| | | | 1,410 | | | | | | (882) | | | | |
|
528
|
| |
No collateral
|
| | | | 385 | | | | | | (276) | | | | |
|
109
|
| |
Net loans receivable
|
| | | $ | 33,864 | | | | | $ | (16,721) | | | | | $ | 17,143 | | |
| | |
Year Ended December 31, 2021
|
| |||||||||||||||
| | |
Fair value hierarchy
|
| |||||||||||||||
Fair value of assets and liabilities
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |||||||||
Cash and cash equivalents
|
| | | $ | 6,952 | | | | | $ | — | | | | | $ | — | | |
Trade receivables and others
|
| | | | 32,393 | | | | | | — | | | | | | — | | |
Other loans receivable
|
| | | | 4,125 | | | | | | — | | | | | | — | | |
Investments
|
| | | | 102 | | | | | | — | | | | | | 6,596 | | |
Accounts payable and accrued liabilities
|
| | | | 49,482 | | | | | | — | | | | | | — | | |
Warrant liability(1)
|
| | | | — | | | | | | — | | | | | | 2,394 | | |
Notes payable
|
| | | | 86,613 | | | | | | — | | | | | | — | | |
Total
|
| | |
$
|
179,667
|
| | | |
$
|
—
|
| | | |
$
|
8,990
|
| |
| | |
Year Ended December 31, 2020
|
| |||||||||||||||
| | |
Fair value hierarchy
|
| |||||||||||||||
Fair value of assets and liabilities
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |||||||||
Cash and cash equivalents
|
| | | $ | 8,859 | | | | | $ | — | | | | | $ | — | | |
Trade receivables and others
|
| | | | 14,568 | | | | | | — | | | | | | — | | |
Blackbird loan receivable
|
| | | | — | | | | | | — | | | | | | 7,128 | | |
Other loans receivable
|
| | | | 10,015 | | | | | | — | | | | | | — | | |
Investments
|
| | | | — | | | | | | 189 | | | | | | 1,000 | | |
Accounts payable and accrued liabilities
|
| | | | 31,086 | | | | | | — | | | | | | — | | |
Notes payable
|
| | | | 71,750 | | | | | | — | | | | | | — | | |
Total | | | | $ | 136,278 | | | | | $ | 189 | | | | | $ | 8,128 | | |
|
Exercise Price
|
| |
$0.26 – 0.30
|
|
|
Risk-Free Annual Interest Rate
|
| |
0.13% – 0.39%
|
|
|
Expected Share Price Volatility
|
| |
60% – 80%
|
|
|
Expected Life of Warrants
|
| |
0.38 – 0.83 years
|
|
| | |
As of and for the year ended December 31, 2021
|
| |||||||||||||||||||||||||||||||||
| | |
Technology/Distribution
|
| |
Cannabis
|
| |
Accessories
|
| |
Corporate & Elim
|
| |
Other
|
| |
Total
|
| ||||||||||||||||||
Revenue
|
| | | $ | — | | | | | $ | 41,923 | | | | | $ | 161,662 | | | | | $ | — | | | | | $ | — | | | | | $ | 203,585 | | |
Inter-segment revenue
|
| | | | — | | | | | | — | | | | | | (880) | | | | | | — | | | | | | — | | | | | | (880) | | |
Net revenue
|
| | | $ | — | | | | | $ | 41,923 | | | | | $ | 160,782 | | | | | $ | — | | | | | $ | — | | | | | $ | 202,705 | | |
Share-based
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | 3,804 | | | | | | — | | | | | | 3,804 | | |
Depreciation and amortization
|
| | | | — | | | | | | 2,313 | | | | | | 14,750 | | | | | | 141 | | | | | | 653 | | | | | | 17,857 | | |
Wages and benefits
|
| | | | — | | | | | | 3,775 | | | | | | 4,881 | | | | | | 8,751 | | | | | | — | | | | | | 17,407 | | |
Impairment loss
|
| | | | | | | | | | 4,987 | | | | | | 25,040 | | | | | | 371 | | | | | | — | | | | | | 30,398 | | |
Interest expense
|
| | | | — | | | | | | 660 | | | | | | 424 | | | | | | 9,283 | | | | | | — | | | | | | 10,367 | | |
Loan losses
|
| | | | — | | | | | | — | | | | | | — | | | | | | 4,562 | | | | | | — | | | | | | 4,562 | | |
Net income (loss)
|
| | | | — | | | | | | (3,277) | | | | | | (25,074) | | | | | | (6,207) | | | | | | (568) | | | | | | (35,126) | | |
Total assets
|
| | | | — | | | | | | 125,103 | | | | | | 237,445 | | | | | | 11,530 | | | | | | 7,270 | | | | | | 381,348 | | |
Total liabilities
|
| | | | — | | | | | | 12,856 | | | | | | 61,804 | | | | | | 81,023 | | | | | | — | | | | | | 155,683 | | |
| | |
As of and for the year ended December 31, 2020
|
| |||||||||||||||||||||||||||||||||
| | |
Technology/
Distribution |
| |
Cannabis
|
| |
Accessories
|
| |
Corporate & Elim
|
| |
Other
|
| |
Total
|
| ||||||||||||||||||
Revenue
|
| | | $ | 54 | | | | | $ | 37,901 | | | | | $ | 122,042 | | | | | $ | — | | | | | $ | — | | | | | $ | 159,997 | | |
Inter-segment revenue
|
| | | | — | | | | | | — | | | | | | (1,588) | | | | | | — | | | | | | — | | | | | | (1,588) | | |
Net revenue
|
| | | $ | 54 | | | | | $ | 37,901 | | | | | $ | 120,454 | | | | | $ | — | | | | | $ | — | | | | | $ | 158,409 | | |
Share-based
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
compensation
|
| | | | — | | | | | | — | | | | | | 384 | | | | | | 3,816 | | | | | | — | | | | | | 4,200 | | |
Depreciation and amortization
|
| | | | 898 | | | | | | 2,413 | | | | | | 14,431 | | | | | | — | | | | | | 614 | | | | | | 18,356 | | |
Wages and benefits
|
| | | | 95 | | | | | | 2,478 | | | | | | 3,685 | | | | | | 6,669 | | | | | | — | | | | | | 12,927 | | |
Impairment loss
|
| | | | 6,478 | | | | | | 9,604 | | | | | | 5,399 | | | | | | 2,460 | | | | | | — | | | | | | 23,941 | | |
Interest expense
|
| | | | 184 | | | | | | 744 | | | | | | 180 | | | | | | 8,282 | | | | | | — | | | | | | 9,390 | | |
Loan losses
|
| | | | — | | | | | | 1,158 | | | | | | — | | | | | | 15,258 | | | | | | — | | | | | | 16,416 | | |
Net income (loss) from continued operations
|
| | | | (8,203) | | | | | | (6,981) | | | | | | (19,214) | | | | | | (24,829) | | | | | | (701) | | | | | | (59,928) | | |
Loss on discontinued operations, net of tax
|
| | | | (56,490) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (56,490) | | |
Net income (loss)
|
| | | | (64,693) | | | | | | (6,981) | | | | | | (19,214) | | | | | | (24,829) | | | | | | (701) | | | | | | (116,418) | | |
Total assets
|
| | | | 8,118 | | | | | | 118,980 | | | | | | 249,909 | | | | | | 17,410 | | | | | | 7,657 | | | | | | 402,074 | | |
Total liabilities
|
| | | | (2,376) | | | | | | 17,177 | | | | | | 46,673 | | | | | | 75,904 | | | | | | 11 | | | | | | 137,389 | | |
| | |
Year ended December 31, 2021
|
| | ||||||||||||||||||||
| | |
USA
|
| |
Canada
|
| |
Other
|
| |
Total
|
| ||||||||||||
Revenue
|
| | | $ | 189,194 | | | | | $ | 13,222 | | | | | $ | 289 | | | | | $ | 202,705 | | |
Gross profit
|
| | | | 46,535 | | | | | | 3,555 | | | | | | 113 | | | | | | 50,203 | | |
Total current assets
|
| | | | 100,804 | | | | | | 82 | | | | | | — | | | | | | 100,886 | | |
Total non-current assets
|
| | | | 280,462 | | | | | | — | | | | | | — | | | | | | 280,462 | | |
Total liabilities
|
| | | | 155,674 | | | | | | 9 | | | | | | — | | | | | | 155,683 | | |
| | |
Year ended December 31, 2020
|
| | ||||||||||||||||||||
| | |
USA
|
| |
Canada
|
| |
Other
|
| |
Total
|
| ||||||||||||
Revenue
|
| | | $ | 148,793 | | | | | $ | 9,121 | | | | | $ | 495 | | | | | $ | 158,409 | | |
Gross profit
|
| | | | 43,310 | | | | | | 2,644 | | | | | | 185 | | | | | | 46,139 | | |
Total current assets
|
| | | | 70,488 | | | | | | 73 | | | | | | — | | | | | | 70,561 | | |
Total non-current assets
|
| | | | 330,964 | | | | | | 549 | | | | | | — | | | | | | 331,513 | | |
Total liabilities
|
| | | | 136,695 | | | | | | 694 | | | | | | — | | | | | | 137,389 | | |
| | |
Year ended December 31, 2021
|
| |||||||||||||||||||||
| | |
Technology/Distribution
|
| |
Cannabis
|
| |
Accessories
|
| |
Total
|
| ||||||||||||
Cannabis (ii)
|
| | | $ | — | | | | | $ | 41,923 | | | | | $ | — | | | | | $ | 41,923 | | |
Vaporization and inhalation devices (ii)
|
| | | | — | | | | | | — | | | | | | 160,782 | | | | | | 160,782 | | |
Other (ii)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | $ | — | | | | | $ | 41,923 | | | | | $ | 160,782 | | | | | $ | 202,705 | | |
| | |
Year ended December 31, 2020
|
| |||||||||||||||||||||
| | |
Technology/Distribution
|
| |
Cannabis
|
| |
Accessories
|
| |
Total
|
| ||||||||||||
Cannabis (ii)
|
| | | $ | — | | | | | $ | 37,901 | | | | | $ | — | | | | | $ | 37,901 | | |
Vaporization and inhalation devices (ii)
|
| | | | — | | | | | | — | | | | | | 120,454 | | | | | | 120,454 | | |
Other (ii)
|
| | | | 54 | | | | | | — | | | | | | — | | | | | | 54 | | |
| | | | $ | 54 | | | | | $ | 37,901 | | | | | $ | 120,454 | | | | | $ | 158,409 | | |