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How Much Net Sales Did TerrAscend Have In 2021?

TORONTOMarch 16, 2022 /CNW/ – TerrAscend Corp. (“TerrAscend” or the “Company”) (CSE: TER) ( OTCQX: TRSSF), a leading North American cannabis operator, today reported its financial results for the fourth quarter and full year periods ending December 31, 2021. All amounts are expressed in U.S. dollars unless indicated otherwise and are prepared under U.S. Generally Accepted Accounting principles (GAAP).

Fourth Quarter 2021 Financial Highlights

  • Net Sales were $49.2 million as compared to $49.1 million in Q3 2021 and $49.6 million in Q4 2020.
  • Gross Profit Margin was 42.3% as compared to 43.8% in Q3 2021 and 55.8% in Q4 2020.
  • Adjusted Gross Profit Margin1 was 49.8% as compared to 46.2% in Q3 2021 and 60.5% in Q4 2020.
  • Adjusted EBITDA1 was $11.9 million as compared to $9.0 million in Q3 2021 and $19.3 million in Q4 2020. Adjusted EBITDA under IFRS, excluding lease expense, was $12.8 million as compared to $10.5 million in Q3 2021.
  • Adjusted EBITDA Margin1 was 24.2% as compared to 18.3% in Q3 2021 and 38.9% in Q4 2020.
  • Cash and cash equivalents, totaled $79.6 million as of December 31, 2021.

Full Year 2021 Financial Highlights

  • Net Sales were $210.4 million, an increase of 42% year-over-year.
  • Gross Profit Margin was 53.3% compared to 54.8% in 2020.
  • Adjusted Gross Profit Margin1 was 56.1% compared to 57.2% in 2020.
  • Adjusted EBITDA1 of $65.6 million compared to $41.7 million in 2020, an increase of 57% year-over-year. Adjusted EBITDA under IFRS, excluding lease expense, was $70.1 million as compared to $45.5 million in 2020.
  • Adjusted EBITDA Margin1 of 31.2% compared to 28.2% in 2020, an expansion of 300 basis points.

Jason Wild, Executive Chairman of TerrAscend, commented, “The strategic decisions we made in Pennsylvania have resulted in the highest quality product we have ever sold in this market. Additionally, the actions undertaken in New Jersey have our team prepared for adult use, where we have one of the largest cultivation footprints in the state, along with three ideal dispensary locations. Furthermore, I am thrilled that we have recently completed our acquisition of Gage, which provides us with a leadership position in yet another multi-billion market and the ability to launch this brand beyond Michigan. I’m proud of the hard work by the team in 2021, which has us well positioned for the explosive growth we expect in 2022 and beyond.”

Financial Summary of Q4 2021, Full Year 2021 and Comparative Periods
(in millions of U.S. dollars)

Q4 2020

Q3 2021

Q4 2021

2020

2021

Revenue, net

49.6

49.1

49.2

147.8

210.4

QoQ increase

30.2%

-16.4%

0.2%

YoY increase

69.9%

28.9%

-0.8%

131.7%

42.4%

Gross profit

27.7

21.5

20.8

81.0

112.1

Adjusted Gross profit1

30.0

22.7

24.5

84.5

118.0

Adjusted gross margin %

60.5%

46.2%

49.8%

57.2%

56.1%

 Share-based compensation expense 

4.7

5.2

1.5

10.1

14.9

General & Administrative expense (excluding share based comp)

12.5

16.1

17.0

55.5

66.0

% of revenue, net

25.2%

32.8%

34.6%

37.6%

31.4%

Adjusted EBITDA1

19.3

9.0

11.9

41.7

65.6

Adjusted EBITDA % of revenue, net

38.9%

18.3%

24.2%

28.2%

31.2%

Net income / (loss) 

(94.0)

55.8

(5.9)

(142.3)

6.1

 Cash Flow from Operations 

(26.9)

(17.9)

(3.8)

(37.0)

(31.8)

Fourth Quarter 2021 Business and Operational Highlights

  • Pennsylvania facility producing highest quality product to date; recapturing top 3 market share for the month of December 2021.2
  • New Jersey wholesale and retail fully prepared for adult-use, pending regulatory approval.
  • Closed on the purchase of a 156,000 square foot facility in Hagerstown, MD for expansion of cultivation and processing, which is expected to be operational during the third quarter of 2022.
  • Completed US GAAP conversion and became a US filer under SEC.

Subsequent Events

  • Closed on the acquisition of Gage Growth Corp.
  • Appointed Ziad Ghanem as President and Chief Operating Officer.
  • Appointed Jared Anderson, SVP Finance & Strategy; Charishma Kothari, SVP Marketing and Charles Oster, SVP Sales.
  • Appointed Kara DioGuardi to the Board of Directors.
  • Became first major MSO to expand its ecommerce platform via proprietary Apothecarium mobile app, available in the Apple App store, with express pick-up and delivery where permitted.

1. Adjusted EBITDA and the respective margin and Adjusted Gross Profit and the respective margin are non-GAAP measures. Please see discussion and reconciliation of non-GAAP measures at the end of this press release.

2. According to Headset Data for the period December 1, 2021 through December 26, 2021.

Full Year and Fourth Quarter 2021 Financial Results

Net sales for the full year 2021 totaled $210.4 million as compared to $147.8 million for 2020, an increase of 42% primarily driven by the Company’s first complete year in the New Jersey medical market and retail growth in Pennsylvania, reflecting the acquisition of KCR in May of 2021, as well as a full year of operations at the three existing Apothecarium dispensaries. Total revenue also benefitted from the late 2020 expansion of State Flower cultivation in California and entry into Maryland through the acquisition of HMS Health in May of 2021.

Net sales for the fourth quarter of 2021 were $49.2 million as compared to $49.1 million for the third quarter of 2021 and $49.6 million for the fourth quarter of 2020.

Gross margin for the full year 2021 was 53.3% as compared to 54.8% for the full year 2020.  Adjusted gross margin, a non-GAAP financial measure, for the full year 2021 was 56.1% compared with 57.2% in 2020 driven by second half under-absorption related to the reset of the Company’s Pennsylvania cultivation facility.

Gross margin for the fourth quarter of 2021 was 42.3% as compared to 43.8% in the third quarter of 2021 related to one-time non-cash write-downs of inventory in Canada and a step up in fair value of inventory related to the acquisition of HMS Health. Adjusted gross margin for the fourth quarter of 2021, excluding these one-time items, was 49.8% as compared to 46.2% for the third quarter of 2021, a 360 basis point improvement quarter-over-quarter.

General & Administrative expenses (G&A) for the full year 2021, excluding stock-based compensation, improved to 31.4% of revenue versus 37.6% of revenue in 2020. G&A excluding stock-based compensation was $66.0 million in 2021, up from $55.5 million in 2020 driven by increased personnel expenses to support the growth of the business and legal expenses primarily related to acquisitions and settlements.  Additionally, lease expense, now part of G&A under US GAAP across all periods, rather than previously being reported as finance expense under IFRS, totaled $4.5 million for 2021 and $3.8 million for 2020, representing approximately 2% of revenue.

G&A, excluding stock-based compensation, for the fourth quarter of 2021 totaled $17.0 million as compared to $16.1 million for the third quarter of 2021 with the increase primarily related to an increase in professional fees for US filer and GAAP conversion work.

Full year 2021 adjusted EBITDA was $65.6 million, or $70.1 million excluding lease expense under IFRS, versus $41.7 million, or $45.5 million excluding lease expense under IFRS in 2020, representing 57% growth year over year. 2021 adjusted EBITDA margin was 31.2% versus 28.2% in 2020, a 300 basis point improvement year over year. This improvement was driven by the ramp up of New Jersey operations, the acquisition of HMS in Maryland, and profitability improvements year over year in both California and Canada.

Fourth quarter 2021 adjusted EBITDA was $11.9 million, representing a 24.2% adjusted EBITDA margin, as compared to $9.0 million and an 18.3% margin in the third quarter of 2021. This sequential improvement in adjusted EBITDA was primarily driven by growth in New Jersey and improvement in Pennsylvania. Adjusted EBITDA, excluding lease expense under IFRS, was $12.8 million in the fourth quarter of 2021 as compared to $10.5 million in the third quarter of 2021.

Operating income for the full year 2021 totaled $23.5 million as compared to $9.6 million in full year 2020, representing an increase of 145% year over year. The increase was primarily driven by the scale up of the New Jersey business and the acquisitions of HMS in Maryland and KCR in PA.

Fourth quarter 2021 operating income was $0.3 million as compared to a loss of $1.8 million for the third quarter of 2021. The improvement quarter over quarter was due to gross margin expansion and lower share based compensation expense.

Net income for the full year 2021 totaled $6.1 million, mainly related to a non-cash $58 million gain on fair value of warrant liability compared with a net loss of $142 million in the prior year, which was impacted by a non-cash $110 million loss on fair value of warrant liability.

Net loss in the fourth quarter was $5.9 million, mainly related to a one-time loss of $3.3 million in lease termination fees, $6.9 million of finance and other expenses, $6.9 million of accrued income taxes, and $2.0 million of transaction costs mostly related to the Gage acquisition. These expenses were partially offset by a $14.4 million non-cash gain on fair value of warrant liability.

Balance Sheet and Cash Flow
Cash and cash equivalents were $79.6 million as of December 31, 2021, compared to $102.6 million as of September 30, 2021 and $59.2 million as of December 31, 2020, providing ample capacity to fund planned organic and inorganic growth initiatives. During the quarter, the Company made the final payment of $25 million related to the partial buyout of its New Jersey partnership, taking ownership up to 87.5%, from 75%.

Cash used in operations was $3.8 million for the three months ended December 31, 2021, mainly driven by an increase in inventory related to the anticipated start of adult use sales in New Jersey. For the full year, cash used in operations was $32 million related to a $24 million working capital increase, mainly related to preparation for New Jersey adult use, and a contingent consideration payment of $11 million.

Capital expenditures were $11.8 million in the fourth quarter of 2021 primarily related to capacity expansions at the Pennsylvania and Maryland facilities, and completion of the third New Jersey dispensary located in Lodi. For the full year 2021 capital expenditures were $38.5 million, of which approximately half was utilized for expansion in Pennsylvania with the remainder related to the buildout of New Jersey and the acquisition of the 156,000 square foot facility in Hagerstown, Maryland.

As of March 15, 2022 there were 318.2 million basic shares outstanding including 251.8 million common shares, 14.0 million preferred shares as converted, and 52.4 million exchangeable shares, including both Canopy and Gage exchangeable shares.

Conference Call

TerrAscend will host a conference call today, March 16, 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.

CONFERENCE CALL DETAILS

DATE:

Wednesday, March 16, 2022

TIME:

5:00 p.m. Eastern Time

WEBCAST:

Click here

DIAL-IN NUMBER:

1-888-664-6392

CONFERENCE ID:

36277662

REPLAY:

(416) 764-8677 or (888) 390-0541
Available until 12:00 midnight Eastern Time Friday, April 1, 2022

Replay Code: 277662

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 years ended December 31, 2021December 31, 2020 and December 31, 2019.
(in millions of U.S. Dollars)

For the years ended

Summary of Adjusted Gross Profit

 December 31, 2021 

 December 31, 2020 

 December 31, 2019 

Gross profit

112,104

81,020

2,558

Add (deduct) the impact of:

Non-cash write downs of inventory

2,417

3,668

6,956

Relief of fair value of inventory upon acquisition

3,465

(230)

2,677

Adjusted gross profit

117,986

84,458

12,191

The table below reconciles Gross Profit and Adjusted Gross Profit for the three months ended December 31, 2021September 30, 2021 and December 31, 2020.
(in millions of U.S. Dollars)

For the Three Month Period Ended

Summary of Adjusted Gross Profit

 December 31, 2021 

 September 31, 2021 

 December 31, 2021 

Gross profit

20,830

21,497

27,735

Add (deduct) the impact of:

Non-cash write downs of inventory

1,968

2,250

Relief of fair value of inventory upon acquisition

1,735

1,163

Adjusted gross profit

24,533

22,660

29,985

The table below reconciles net income (loss) to EBITDA and Adjusted EBITDA for the years ended December 31, 2021December 31, 2020 and December 31, 2019.

(in millions of U.S. Dollars)

For the years ended

Summary of EBITDA and Adjusted EBITDA

 December 31,
2021 

 December 31,
2020 

 December 31,
2019 

Net income (loss)

$

6,135

$

(142,256)

$

(163,147)

Add (deduct) the impact of:

Provision for income taxes

28,314

10,769

1,769

Interest accretion

24,662

8,416

3,694

Amortization and depreciation

15,390

10,433

4,444

EBITDA

74,501

$

(112,638)

$

(153,240)

Add (deduct) the impact of:

Non-cash write downs of inventory

2,417

$

3,668

$

6,956

Relief of fair value of inventory upon acquisition

3,465

(230)

2,677

Share-based compensation

14,941

10,475

7,661

Impairment of goodwill and intangible assets

8,640

766

49,111

Impairment of property and equipment

470

823

1,746

Loss on lease termination

3,278

Revaluation of contingent consideration

3,584

18,709

46,857

Restructuring costs and executive severance

931

1,023

121

Legal settlements

2,121

Fees for services related to NJ licenses

7,500

Other one-time items

6,070

1,070

8,323

(Gain) loss on fair value of warrants and purchase option derivative asset

(57,904)

110,518

Indemnification asset release

4,504

Unrealized and realized (gain) loss on investments and notes receivable

(6,192)

(186)

4,394

Unrealized foreign exchange loss

4,810

178

313

Adjusted EBITDA

$

65,636

$

41,676

$

(25,081)

The table below reconciles net income (loss) to EBITDA and Adjusted EBITDA for the three months ended December 31, 2021September 30, 2021 and December 31, 2020.

(in millions of U.S. Dollars)

For the Three Month Period Ended

Summary of EBITDA and Adjusted EBITDA

 December 31, 2021 

 September 31, 2021 

 December 31, 2021 

Net (loss) income

(5,927)

55,834

(93,982)

Add (deduct) the impact of:

Provision for income taxes

6,942

4,999

2,791

Interest accretion

6,528

6,351

2,810

Amortization and depreciation

4,140

4,200

3,160

EBITDA

11,683

71,384

(85,221)

Add (deduct) the impact of:

Non-cash write downs of inventory

1,968

2,250

Relief of fair value of inventory upon acquisition

1,735

1,163

Share-based compensation

1,548

5,178

4,657

Impairment of goodwill and intangible assets

32

Impairment of property and equipment

470

823

Loss on lease termination

3,278

Revaluation of contingent consideration

932

(338)

4,042

Restructuring costs and executive severance

14

450

74

Other one-time items

3,583

1,365

8

(Gain) loss on fair value of warrants and purchase option derivative asset

(14,189)

(69,016)

92,685

Indemnification asset release

613

95

Unrealized and realized (gain) loss on investments and notes receivable

(126)

Unrealized and realized foreign exchange loss

228

(1,256)

67

Adjusted EBITDA

11,863

9,025

19,291

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.

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.

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.

Consolidated Balance Sheets
(Amounts expressed in thousands of United States dollars, except for per share amounts)

At

At

December 31,
2021

December 31,
2020

Assets

Current Assets

Cash and cash equivalents

$

79,642

$

59,226

Accounts receivable, net

14,920

10,856

Share subscriptions receivable

105

Inventory

42,323

20,561

Prepaid expenses and other current assets

6,231

4,903

143,221

95,546

Non-Current Assets

Property and equipment, net

140,762

110,245

Operating lease right of use assets

29,561

23,229

Intangible assets, net

168,984

110,710

Goodwill

90,326

72,796

Indemnification asset

3,969

11,500

Investment in associate

1,379

Other non-current assets

5,111

1,839

438,713

331,698

Total Assets

$

581,934

$

427,244

Liabilities and Shareholders’ Equity

Current Liabilities

Accounts payable and accrued liabilities

$

30,340

$

27,382

Deferred revenue

1,071

638

Loans payable, current

8,837

5,734

Contingent consideration payable, current

9,982

30,966

Lease liability, current

1,193

1,025

Corporate income tax payable

18,939

27,739

70,362

93,484

Non-Current Liabilities

Loans payable, non-current

176,306

171,172

Contingent consideration payable, non-current

2,553

6,590

Lease liability, non-current

30,754

23,836

Warrant liability

54,986

132,257

Convertible debentures

5,284

Deferred income tax liability

14,269

7,937

Other non-current liabilities

3,750

282,618

347,076

Total Liabilities

352,980

440,560

Commitments and Contingencies

Shareholders’ Equity (Deficit)

Share Capital

Series A, convertible preferred stock, no par value, unlimited shares authorized; and 13,708 and 14,258 shares outstanding as of December 31, 2021 and December 31, 2020, respectively

Series B, convertible preferred stock, no par value, unlimited shares authorized; and 610 and 710 shares outstanding as of December 31, 2021 and December 31, 2020, respectively

Series C, convertible preferred stock, no par value, unlimited shares authorized; and 36 and nil shares outstanding as of December 31, 2021 and December 31, 2020, respectively

Series D, convertible preferred stock, no par value, unlimited shares authorized; and nil and nil shares outstanding as of December 31, 2021 and December 31, 2020, respectively

Proportionate voting shares, no par value, unlimited shares authorized; and nil and 76,307 shares outstanding as of December 31, 2021 and December 31, 2020, respectively

Exchangeable shares, no par value, unlimited shares authorized; and 38,890,571 and 38,890,571 shares outstanding as of December 31, 2021 and December 31, 2020, respectively

Common stock, no par value, unlimited shares authorized; 190,930,800 and 79,526,785 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively

Additional paid in capital

535,418

305,138

Accumulated other comprehensive income (loss)

2,823

(3,662)

Accumulated deficit

(314,654)

(318,594)

Non-controlling interest

5,367

3,802

Total Shareholders’ Equity (Deficit)

228,954

(13,316)

Total Liabilities and Shareholders’ Equity (Deficit)

$

581,934

$

427,244

Consolidated Statements of Operations and Comprehensive Income (Loss)
(Amounts expressed in thousands of United States dollars, except for per share amounts)

For the years ended

December 31,
2021

December 31,
2020

December 31,
2019

Revenue

$

222,067

$

157,906

$

66,164

Excise and cultivation taxes

(11,648)

(10,073)

(2,351)

Revenue, net

210,419

147,833

63,813

Cost of sales

98,315

66,813

61,255

Gross profit

112,104

81,020

2,558

Operating expenses:

General and administrative

80,973

65,534

45,898

Amortization and depreciation

7,656

5,562

3,067

Research and development

317

582

Total operating expenses

88,629

71,413

49,547

Income (loss) from operations

23,475

9,607

(46,989)

Other (income) expense

Revaluation of contingent consideration

3,584

18,709

46,857

(Gain) loss on fair value of warrants and purchase option derivative asset

(57,904)

110,518

Finance and other expenses

29,229

8,193

3,524

Transaction and restructuring costs

3,111

2,093

8,444

Impairment of goodwill

5,007

45,802

Impairment of intangible assets

3,633

766

3,309

Impairment of property and equipment

470

823

1,746

Loss on lease termination

3,278

Unrealized foreign exchange loss

4,810

178

313

Unrealized and realized (gain) loss on investments and notes receivable

(6,192)

(186)

4,394

Income (loss) before provision for income taxes

34,449

(131,487)

(161,378)

Provision for income taxes

28,314

10,769

1,769

Net income (loss)

$

6,135

$

(142,256)

$

(163,147)

Foreign currency translation

(6,485)

2,875

(2,088)

Comprehensive income (loss)

$

12,620

$

(145,131)

$

(161,059)

Net income (loss) attributable to:

Common and proportionate Shareholders of the Company

$

3,111

$

(139,204)

$

(160,668)

Non-controlling interests

$

3,024

$

(3,052)

$

(2,479)

Comprehensive income (loss) attributable to:

Common and proportionate Shareholders of the Company

$

9,596

$

(142,079)

$

(158,580)

Non-controlling interests

$

3,024

$

(3,052)

$

(2,479)

Net income (loss) per share, basic and diluted

Net income (loss) per share – basic

$

0.02

$

(0.93)

$

(1.61)

Weighted average number of outstanding common and proportionate voting shares

181,056,654

149,740,210

99,592,007

Net income (loss) per share – diluted

$

0.01

$

(0.93)

$

(1.61)

Weighted average number of outstanding common and proportionate voting shares, assuming dilution

208,708,664

149,740,210

99,592,007

Consolidated Statements of Cash Flows
(Amounts expressed in thousands of United States dollars, except for per share amounts)

For the years ended

December 31, 2021

December 31, 2020

December 31, 2019

Operating activities

Net income (loss)

$

6,135

$

(142,256)

$

(163,147)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities

Non-cash write downs of inventory

3,052

7,167

10,805

Accretion expense

4,363

5,500

973

Depreciation of property and equipment and amortization of intangible assets

15,390

10,433

4,444

Amortization of operating right-of-use assets

1,247

4,239

1,086

Share-based compensation

14,941

10,475

7,661

Deferred income tax expense

(1,808)

(11,970)

(1,234)

(Gain) loss on fair value of warrants and purchase option derivative

(57,904)

110,518

Revaluation of contingent consideration

3,584

18,709

46,857

Impairment of goodwill and intangible assets

8,640

766

49,111

Impairment of property and equipment

470

823

1,746

Loss on lease termination

3,278

Release of indemnification asset

4,504

Forgiveness of loan principal and interest

(1,414)

Fees for services related to NJ licenses

7,500

Unrealized foreign exchange loss

4,810

178

313

Unrealized and realized (gain) loss on investments and notes receivable

(6,192)

(186)

4,394

Changes in operating assets and liabilities

Receivables

(2,967)

(4,472)

199

Inventory

(17,375)

(11,779)

(6,651)

Prepaid expense and deposits

(1,445)

(46)

(456)

Other assets

(423)

(442)

Accounts payable and accrued liabilities and other payables

2,162

6,364

1,548

Operating lease liability

(705)

(3,055)

(1,042)

Other liability

3,750

Contingent consideration payable

(11,394)

(56,527)

Corporate income taxes payable

(6,938)

11,358

2,653

Deferred revenue

424

(268)

899

Net cash used in operating activities

(31,815)

(36,971)

(39,841)

Investing activities

Investment in property and equipment

(38,483)

(44,621)

(32,834)

Investment in intangible assets

(387)

(896)

(1,306)

Investment in notes receivable

(10,456)

Principal payments received on notes receivable

6,111

Principal payments received on lease receivable

693

124

Sale of investments

2,427

Distribution of earnings from associates

469

153

Investment in NJ partnership

(50,000)

Investment in joint venture

(620)

Deposits for property and equipment

(1,977)

Deposits for business acquisition

(1,389)

Cash portion of consideration paid in acquisitions, net of cash acquired

(42,736)

(67,540)

Cash received on acquisitions

739

Net cash used in investing activities

(132,421)

(45,890)

(104,218)

Financing activities

Proceeds from options and warrants exercised

30,785

7,287

26,894

Proceeds from loans payable

766

201,496

42,843

Capital contributions (paid) received by non-controlling interests

(53)

393

1,906

Loan principal paid

(4,500)

(53,886)

Loan origination fee paid

(2,250)

Payments of contingent consideration

(18,274)

(90,657)

Proceeds from convertible debentures, net of issuance costs

15,336

Proceeds from private placement, net of share issuance costs

173,477

71,023

49,955

Net cash provided by financing activities

182,201

133,406

136,934

Net increase (decrease) in cash and cash equivalents during the period

17,965

50,544

(7,125)

Net effects of foreign exchange

2,451

(480)

327

Cash and cash equivalents, beginning of period

59,226

9,162

15,960

Cash and cash equivalents, end of period

$

79,642

$

59,226

$

9,162

Supplemental disclosure with respect to cash flows

Income taxes paid

$

37,060

$

11,204

$

Interest paid

$

21,694

$

2,192

$

2,760

Non-cash transactions

Shares issued as consideration for acquisitions

34,427

56,663

Shares issued for compensation of services

3,750

Accrued capital purchases

450

4,544

7,042

Notes receivable settled for business acquisition

3,032

Promissory note issued as consideration for acquisitions

8,839

Conversion of shares into note receivable

3,163

Conversion of note receivable into shares

(2,687)

SOURCE TerrAscend

For further information: For more information regarding TerrAscend: Keith Stauffer, Chief Financial Officer, ir@terrascend.com; Rob Kelly, MATTIO Communications, terrascend@mattio.com, 416-992-4539

Source: Newswire.ca