TerrAscend Corp
For the period ended Jun 30, 2024. Filed Aug 8, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 8, 2024
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0000950170-24-056868
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0000950170-24-093867
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 164 previous paragraphs and 181 current paragraphs.
119 unchanged; 31 reworded; 26 added; 13 removed; 1 previous and 5 current paragraphs rearranged.
Tables are not compared: 14 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
On July 19, 2024, the Company made a prepayment of the Chicago Atlantic Term Loan of $1,500 at par.
Current report
On August 1, 2024, the Company and TerrAscend USA, Inc., as guarantors, and each of WDB Holding CA, Inc., WDB Holding PA, Inc., WDB Holding MI, Inc., Moose Curve Holdings, LLC, and Hempaid, LLC, including certain of each of their respective subsidiaries, as borrowers (collectively, the “Borrowers”), and FG Agency Lending LLC, as the Administrative Agent (the “Agent”) entered into a Loan Agreement (the “FG Loan”). The FG Loan provides for a four-year, $140,000 senior-secured term loan with an initial draw on August 1, 2024, upon closing of the FG Loan, of $114,000 (the “Initial Draw”) and a delayed draw of $26,000 expected to occur on September 30, 2024 (the “Delayed Draw”). Proceeds from the Initial Draw were used to retire the Ilera Term Loan, the Stearns Loan and certain other indebtedness (collectively, the “Retired Loans”), in addition to being used for working capital and general corporate purposes. As a result, each outstanding obligation under the Retired Loans were repaid in full and subsequently terminated. The proceeds from the Delayed Draw will be used to retire the Chicago Atlantic Term Loan. The FG Loan is guaranteed by the Company and TerrAscend USA, Inc. and is secured by substantially all of the assets of the Borrowers. The FG Loan bears interest at 12.75% per annum and matures on August 1, 2028. Certain funds controlled by the Company’s Executive Chairman, Jason Wild, a related party of the Company, have invested approximately $7,500 under the FG Loan.
Current report
Other operating (income) expense primarily represents (gains) losses on lease terminations and (gains) losses on disposal of fixed assets.
Current report
Loss (gain) on fair value of derivative liabilities and purchase option derivative assets
Current report
General and administrative expense
Current report
The decrease of $6,416 in general and administrative expense for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, is primarily related to a bad debt recovery of $4,188 as well as an insurance recovery of $871.
Current report
Gain on fair value of derivative liabilities and purchase option derivative assets
Current report
During the three months ended June 30, 2024, Other operating (income) loss increased as compared to the three months ended June 30, 2023, primarily due to the Company recording a gain on lease termination of $1,169 related to its California business.
Current report
Results from Operations - Six Months Ended June 30, 2024 and June 30, 2023
Current report
Revenue increased from $141,522 to $158,156 for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 primarily driven by the implementation of adult-use sales in Maryland and the Company's four Maryland acquisitions in 2023, as well as an increase in sales in New Jersey and Pennsylvania, partially offset by declines in California and Michigan.
Current report
General and administrative expense
Current report
The decrease of $6,138 in general and administrative expense for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, is primarily related to a bad debt recovery of $4,188 as well as an insurance recovery of $871.
Current report
The loss from the revaluation of contingent consideration for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was due to a loss on the revaluation of contingent liability for State Flower, The Apothecarium, and Peninsula acquisition resulting from a decrease in the Company's share price on June 30, 2024, as compared to December 31, 2023.
Current report
Loss (gain) on fair value of derivative liabilities and purchase option derivative assets
Current report
During the six months ended June 30, 2023, the Company recognized a gain on fair value warrants of $653 as a result of the reduction of the Company's share price from June 30, 2023, as compared to December 31, 2022.
Current report
During the six months ended June 30, 2024, Other operating (income) loss increased as compared to the six months ended June 30, 2023, primarily due to the Company recording a gain on lease termination of $1,169 related to its California business.
Current report
The change in provision for income taxes from $19,112 for the six months ended June 30, 2023 as compared to a provision for income taxes of $20,400 for the six months ended June 30, 2024 was primarily driven by higher gross profit margin.
Current report
The Company previously concluded that substantial doubt existed as to its ability to continue as a going concern primarily due to the Company's current liabilities exceeding its current assets related to its loans maturing within the current year. On August 1, 2024, the Company entered into a four-year $140,000 senior secured term loan with an initial draw of $114,000 used to retire the majority of its loans coming due within the next year and a delayed draw of $26,000, expected to occur on September 30, 2024 which will be used to retire the Chicago Atlantic Term Loan resulting in positive net working capital for the Company. See Note 10 and Note 25 for more information regarding the refinancing.
Current report
Following the retiring and financing of the Company’s loans coming due within the next year , along with its ability to identify access to future capital, and continued improvement in cash flow from the Company's consolidated operations, management has determined that substantial doubt no longer exists in the Company's ability to continue as a going concern..
Current report
As of June 30, 2024, there was an outstanding principal amount of $68,927 under the Ilera Term Loan. Subsequent to June 30, 2024, the Company entered into a four-year $140,000 senior secured term loan that matures in August 2028, of which, the proceeds were used to retire the Ilera Term Loan and pay the outstanding principal amount of $68,927.
Current report
As of June 30, 2024, there was an outstanding principal amount of $24,196 under the Chicago Atlantic Term Loan. Subsequent to June 30, 2024, the Company made a prepayment of the Chicago Atlantic Term Loan of $1,500 at par. On August 1, 2024, the Company entered into a four-year $140,000 senior secured term loan that matures in August 2028, of which, a portion of the proceeds will be used to retire the Chicago Atlantic Term Loan and pay the outstanding principal amount of $22,696.
Current report
As of June 30, 2024, there was an outstanding principal amount of $24,638 under the Stearns Loan. Subsequent to June 30, 2024, the Company entered into a four-year $140,000 senior secured term loan that matures in August 2028, of which, the proceeds were used to retire the Stearns Loan and pay the outstanding principal amount of $24,638.
Current report
Represents the recovery of one-time write offs of accounts receivable related to one customer that were deemed uncollectible.
Current report
Represents gain taken on write-down of property and equipment.
Current report
k)
Removed paragraphs (13)
Previous report
On January 2, 2024, the Company made a prepayment of the Ilera Term Loan of $4,800 at 100% to par.
Previous report
On January 15, 2024, the Company paid off the IHC Real Estate LP promissory note with a final payment of $5,000.
Previous report
On January 19, 2024, the Company acquired the remaining 50.1% equity in State Flower, a California cultivator, with a payment of $250 in cash and an aggregate of 2,888,088 Common Shares. The Company also acquired the remaining 50.1% equity in three Apothecarium dispensaries in California with a payment of $1,233 in stock for each entity. As a result of these acquisitions, the Company now wholly owns State Flower and the three Apothecarium dispensaries in California.
Previous report
Cost of sales
Previous report
Loss (gain) on fair value of warrants and purchase option derivative asset
Previous report
Provision for income taxes
Previous report
Cost of sales
Previous report
Loss (gain) on fair value of warrants and purchase option derivative asset
Previous report
Provision for income taxes
Previous report
At March 31, 2024, the Company had an accumulated deficit of $717,398. During the three months ended March 31, 2024, the Company incurred a net loss from continuing operations of $14,851. Additionally, as of March 31, 2024 the Company’s current liabilities exceed its current assets. Therefore, it is possible that the Company may need additional capital to continue to fund its operations.
Previous report
The aforementioned indicators raise substantial doubt about the Company's ability to continue as a going concern for at least one year from the issuance of the Consolidated Financial Statements included elsewhere in this Quarterly Report on From 10-Q. The Company believes this concern is mitigated by steps it has taken, or intends to take to improve its operations and cash position, including: (i) identifying access to future capital required to pay down or refinance the Company’s maturing debt, (ii) improved cashflow growth from the Company's consolidated operations, particularly TerrAscend's operations in New Jersey and most recently Maryland with conversion to adult-use sales, and (iii) various cost and efficiency improvements. The Consolidated Financial Statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amounts of and classification of liabilities that may result should the Company be unable to continue as a going concern.
Previous report
As of March 31, 2024, there was an outstanding principal amount of $72,127 under the Ilera Term Loan. Subsequently, the Company paid an additional $3,200 which resulted in a current outstanding principal amount of $68,927.
Previous report
As of March 31, 2024, there was an outstanding principal amount of $24,404 under the Chicago Atlantic Term Loan.
Reworded paragraphs (31)
Previous wording
This Management’s Discussion and Analysis (“MD&A”) of the financial condition and results of operations of the Company is for the three months ended March 31, 2024 and 2023 and the accompanying notes for each respective period.
Current wording
This Management’s Discussion and Analysis (“MD&A”) of the financial condition and results of operations of the Company is for the three and six months ended June 30, 2024 and 2023 and the accompanying notes for each respective period.
Previous wording
TerrAscend Michigan (“TerrAscend MI”), a wholly-owned operation with nineteen dispensaries, and three cultivation and processing facilities;
Current wording
TerrAscend Michigan (“TerrAscend MI”), a wholly-owned operation with twenty dispensaries, and three cultivation and processing facilities;
Previous wording
TerrAscend California (“TerrAscend CA”), a wholly-owned operation with five dispensaries, and a cultivation facility; and;
Current wording
TerrAscend California (“TerrAscend CA”), a wholly-owned operation with four dispensaries, and a cultivation facility; and
Previous wording
TerrAscend Canada Inc. (“TerrAscend Canada”) is a cannabis retailer in Ontario, Canada with a majority-owned dispensary in Toronto, Ontario, Canada ("Cookies Canada").
Current wording
TerrAscend Canada Inc. (“TerrAscend Canada”), a cannabis retailer in Ontario, Canada with a majority-owned dispensary in Toronto, Ontario, Canada ("Cookies Canada").
Previous wording
Revenue increased from $69,398 to $80,633 for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 primarily driven by the implementation of adult-use sales in Maryland and the Company's four Maryland acquisitions in 2023, a doubling of wholesale sales in New Jersey, and an 80% increase in wholesale sales in Pennsylvania, partially offset by retail declines in New Jersey and Michigan.
Current wording
Revenue increased from $72,124 to $77,523 for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 primarily driven by the implementation of adult-use sales in Maryland and the Company's four Maryland acquisitions in 2023, as well as an increase in sales in New Jersey and Pennsylvania, partially offset by declines in California and Michigan.
Previous wording
The increase of $6,404 in cost of sales for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was mainly due to an increase in sales. Cost of sales as a percentage of revenue was relatively constant for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.
Current wording
The increase of $3,942, in cost of sales for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 was mainly due to an increase in sales. Cost of sales as a percentage of revenue was relatively constant for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023.
Previous wording
The loss from the revaluation of contingent consideration for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was due to fair value changes of $1,915 relating to the settlement of the State Flower and The Apothecarium contingent consideration. This was offset by a gain on the revaluation of contingent liability for Peninsula acquisition of $522, resulting from the increase in the Company's share price from December 31, 2023, as compared to March 31, 2024.
Current wording
The loss from the revaluation of contingent consideration for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 was due to a loss on the revaluation of contingent liability for State Flower, The Apothecarium, and Peninsula acquisition resulting from a decrease in the Company's share price on June 30, 2024, as compared to March 31, 2024.
Previous wording
The warrant liability was remeasured to fair value at March 31, 2024 using the Black-Scholes Model. The Company recognized a loss of $983 during the three months ended March 31, 2024 as a result of the rising share price from March 31, 2024, as compared to December 31, 2023.
Current wording
The warrant liability was remeasured to fair value at June 30, 2024 using the Black-Scholes Model. The Company recognized a gain of $2,922 during the three months ended June 30, 2024 as a result of the reduction of the Company's share price from June 30, 2024, as compared to March 31, 2024.
Previous wording
During the three months ended March 31, 2023, the Company recognized a gain on fair value warrants of $438 as a result of the reduction of the Company's share price from March 31, 2023, as compared to December 31, 2022.
Current wording
During the three months ended June 30, 2023, the Company recognized a gain on fair value warrants of $215 as a result of the reduction of the Company's share price from June 30, 2023, as compared to March 31, 2023.
Previous wording
The change in provision for income taxes from $12,664 for the three months ended March 31, 2023 as compared to a provision for income taxes of $9,671 for the three months ended March 31, 2024 was primarily driven by a return to provision adjustment.
Current wording
The change in provision for income taxes from $6,448 for the three months ended June 30, 2023 as compared to a provision for income taxes of $10,729 for the three months ended June 30, 2024 was primarily driven by a higher gross profit margin in the second quarter of 2024.
Previous wording
During the three months ended March 31, 2024, the Company recorded an impairment of property and equipment of $2,438 due to the wind-down of one of its California dispensaries.
Current wording
During the six months ended June 30, 2024, the Company recorded an impairment of property and equipment of $2,438 due to the wind-down of one of its California dispensaries.
Previous wording
The Company has $197,184 in principal amounts of loans payable at March 31, 2024. Of this amount, $136,291 are due within the next twelve months.
Current wording
The Company has $191,625 in principal amounts of loans payable at June 30, 2024. Of this amount, $15,402 are due within the next twelve months.
Previous wording
The Company has entered into leases for certain premises and offices for which it owes monthly lease payments. The Company has $92,716 in lease obligations. Of this amount, $9,479 are due in the next twelve months.
Current wording
The Company has entered into leases for certain premises and offices for which it owes monthly lease payments. The Company has $89,909 in lease obligations. Of this amount, $7,357 are due in the next twelve months.
Previous wording
The Company's undiscounted contingent consideration payable is $2,914 at March 31, 2024, of which, $1,490 is due in the next twelve months. The contingent consideration payable relates to the Company's acquisitions of Peninsula and the remaining 50.1% equity in both State Flower and three Apothecarium dispensaries in California. The contingent considerations are based upon the price protection of Common Shares issued under the terms of the applicable acquisition agreements. The contingent considerations are measured at fair value using the Black-Scholes Model and revalued at the end of each reporting period.
Current wording
The Company's undiscounted contingent consideration payable is $4,741 at June 30, 2024, of which, $2,632 is due in the next twelve months. The contingent consideration payable relates to the Company's acquisitions of Peninsula and the remaining 50.1% equity in both State Flower and three Apothecarium dispensaries in California. The contingent considerations are based upon the price protection of Common Shares issued under the terms of the applicable acquisition agreements. The contingent considerations are measured at fair value using the Black-Scholes Model and revalued at the end of each reporting period.
Previous wording
At March 31, 2024, the Company had accounts payable and accrued liabilities of $49,673 and corporate income taxes payable of $5,143.
Current wording
At June 30, 2024, the Company had accounts payable and accrued liabilities of $46,918 and corporate income taxes payable of $3,184.
Previous wording
The Pinnacle Acquisition purchase price included two promissory notes in an aggregate amount of $10,000 to pay down all Pinnacle liabilities and encumbrances. The promissory note matures on June 30, 2023 and bears interest rates of 6%. On June 27, 2023, Spartan Partners Properties, LLC, agreed to an amendment among other things, to extend the obligation date of the loan until December 1, 2023. As of March 31, 2024, there was an outstanding principal amount of $5,582 on the two promissory notes. The obligations are subject to restructuring upon the resolution of indemnity claims.
Current wording
The Pinnacle Acquisition purchase price included two promissory notes in an aggregate amount of $10,000 to pay down all Pinnacle liabilities and encumbrances. The promissory note matures on June 30, 2023 and bears interest rates of 6%. On June 27, 2023, Spartan Partners Properties, LLC, agreed to an amendment among other things, to extend the obligation date of the loan until December 1, 2023.
Previous wording
On June 26, 2023, the Company closed on a $25,000 commercial loan with Stearns Bank, secured by the Company's cultivation facility in Pennsylvania and its Allegany Medical Marijuana Dispensary ("AMMD") dispensary in Cumberland, Maryland (the “Stearns Loan”). The Company was required to hold $5,000 on deposit in a restricted account, of which $2,500 of the restricted cash was released on July 28, 2023 upon meeting certain criteria pursuant to the terms of the Stearns Loan. The Stearns Loan bears interest at a rate of prime plus 2.25% and matures on December 26, 2024. The proceeds from the loan were used to pay down the Company's higher interest rate debt, thereby lowering the Company's overall interest expense. As of March 31, 2024, there was an outstanding principal amount of $24,721 under the Stearns Loan.
Current wording
On June 26, 2023, the Company closed on a $25,000 commercial loan with Stearns Bank, secured by the Company's cultivation facility in Pennsylvania and its Allegany Medical Marijuana Dispensary ("AMMD") dispensary in Cumberland, Maryland (the “Stearns Loan”). The Company was required to hold $5,000 on deposit in a restricted account, of which $2,500 of the restricted cash was released on July 28, 2023 upon meeting certain criteria pursuant to the terms of the Stearns Loan. The Stearns Loan bears interest at a rate of prime plus 2.25% and matures on December 26, 2024. The proceeds from the loan were used to pay down the Company's higher interest rate debt, thereby lowering the Company's overall interest expense.
Previous wording
As of March 31, 2024, there was an outstanding principal amount of $19,495 under the promissory notes related to the Maryland acquisitions.
Current wording
As of June 30, 2024, there was an outstanding principal amount of $19,115 under the promissory notes related to the Maryland acquisitions.
Previous wording
In connection with the Gage Acquisition, the Company assumed existing indebtedness in the form of a promissory note in the amount of $4,065, which matures on December 31, 2024. The promissory note bears interest at a rate of 6%. As of March 31, 2024, there was an outstanding principal amount of $1,322 on the promissory note.
Current wording
In connection with the Gage Acquisition, the Company assumed existing indebtedness in the form of a promissory note in the amount of $4,065, which matures on December 31, 2024. The promissory note bears interest at a rate of 6%. As of June 30, 2024, there was an outstanding principal amount of $936 on the promissory note.
Previous wording
On June 26, 2023, the Company bought out the minority interest in IHC Real Estate LP and entered into a promissory note of $7,500. The promissory note carries an interest rate of 15% and matures on January 15, 2024. On June 28, 2023 and July 31, 2023, the Company made a payment of $1,500 and $1,000, respectively. On January 15, 2024, the Company paid off all amounts owed under the promissory note with a payment of $5,000.
Current wording
On June 26, 2023, the Company bought out the minority interest in IHC Real Estate LP and entered into a promissory note of $7,500. The promissory note carried an interest rate of 15% and matured on January 15, 2024. On June 28, 2023 and July 31, 2023, the Company made a payment of $1,500 and $1,000, respectively. On January 15, 2024, the Company paid off all amounts owed under the promissory note with a payment of $5,000.
Previous wording
The increase of $4,826 in net cash provided by operating activities for the three months ended March 31, 2024 as compared to three months ended March 31, 2023 is due primarily to growth in revenue and gross margin while maintaining SG&A expenses relatively flat.
Current wording
The increase of $17,260 in net cash provided by operating activities for the six months ended June 30, 2024 as compared to six months ended June 30, 2023 is due primarily to growth in revenue and gross margin while maintaining SG&A expenses relatively flat. Additionally, the change was driven by $2,881 of cash received for a bad debt recovery and an income tax refund related to the amended federal tax return for tax year 2020 in the amount of $8,371.
Previous wording
The net cash used in investing activities for the three months ended March 31, 2024 primarily relates to investment in property and equipment of $2,796.
Current wording
The net cash used in investing activities for the six months ended June 30, 2024 primarily relates to the investment in property and equipment of $4,272.
Previous wording
Net cash used in investing activities for the three months ended March 31, 2023 primarily relates to the cash paid to AMMD of $9,611. Additionally, investment in property and equipment was $2,497 during the three months ended March 31, 2023.
Current wording
Net cash used in investing activities for the six months ended June 30, 2023 primarily relates to the cash paid for the acquisition of three dispensaries in Maryland of $14,469. Additionally, the Company increased the investment in property and equipment by $5,426 during the six months ended June 30, 2023. The Company also recognized a disposal of fixed assets related to its discontinued operations of $14,285.
Previous wording
Net cash used in financing activities for the three months ended March 31, 2024 was primarily due to net loan principal payments of $9,078 and distributions to minority partners of $337.
Current wording
Net cash used in financing activities for the six months ended June 30, 2024 was primarily due to net loan principal payments of $18,048 and distributions to minority partners of $2,283.
Previous wording
Net cash provided by financing activities for the three months ended March 31, 2023 was primarily due to cash inflow of $12,677 as a result of transfer with recourse of Employee Retention Credit, offset by principal payments on loans of $1,204 and capital contributions paid to non-controlling interest holders of $1,884.
Current wording
Net cash provided by financing activities for the six months ended June 30, 2023 was primarily due to cash inflow as a result of transfer with recourse of Employee Retention Credit of $12,677, net proceeds from the commercial loan with Stearns bank of $23,872, and net proceeds from private placements of $19,218, offset by loan principal paid of $40,359 and distributions to minority partners of $3,415.
Previous wording
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 (i) Free cash flow from net cash provided by (used in) operating activities from continuing operations less capital expenditures for property and equipment which management believes is an important measurement of the Company's ability to generate additional cash from its business operations, and (ii) Adjusted EBITDA from continuing operations as net (loss) income, adjusted to exclude provision for income taxes, finance expenses, depreciation and amortization, relief of fair value upon acquisition, share-based compensation, gain on extinguishment of debt, restructuring related charges, impairment of goodwill and intangible assets and certain other items, which management believes is 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.
Current wording
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 (i) Free cash flow from net cash provided by (used in) operating activities from continuing operations less capital expenditures for property and equipment which management believes is an important measurement of the Company's ability to generate additional cash from its business operations, and (ii) Adjusted EBITDA from continuing operations as net loss, adjusted to exclude provision for income taxes, finance expenses, depreciation and amortization, share-based compensation, loss from revaluation of contingent consideration, gain on fair value of derivative liabilities and purchase option derivative assets, gain on lease termination, and certain other items, which management believes is 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.
Previous wording
The Company believes Adjusted EBITDA from continuing operations is a useful performance measure to assess the performance of the Company as it provides more meaningful ongoing 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 net loss to
Current wording
The Company believes Adjusted EBITDA from continuing operations is a useful performance measure to assess the performance of the Company as it provides more meaningful ongoing 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 net loss to EBITDA from continuing operations and Adjusted EBITDA from continuing operations for the three and six months ended June 30, 2024 and 2023:
Previous wording
The table below reconciles net cash provided by (used in) operating activities from continuing operations to free cash flow for the three months ended March 31, 2024 and 2023:
Current wording
The table below reconciles net cash provided by (used in) operating activities from continuing operations to free cash flow for the six months ended June 30, 2024 and 2023:
Previous wording
Represents the (gain) loss taken as a result on lease termination and derecognition of right of use assets.
Current wording
Represents the gain taken as a result on lease termination and derecognition of right of use assets.
Previous wording
Includes one-time fees incurred in connection with the Company's acquisitions, such as expenses related to professional fees, consulting, legal, and accounting, that would otherwise not have incurred. These fees are not indicative of the Company's ongoing costs.
Current wording
Includes one-time fees incurred primarily in connection with the Company's acquisitions and other costs considered one-time in nature, such as expenses related to professional fees, consulting, legal, and accounting. These fees are not indicative of the Company's ongoing costs.
Previous wording
The increase in Adjusted EBITDA from continuing operations for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily due to the implementation of adult-use sales in Maryland and the Company's four Maryland acquisitions in 2023 while cost of sales for the Company remained constant.
Current wording
The increase in Adjusted EBITDA from continuing operations for the three and six months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily due to the implementation of adult-use sales in Maryland and the Company's four Maryland acquisitions in 2023 while cost of sales for the Company remained constant.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
The following tables represent the Company’s results from operations for the six months ended June 30, 2024 and 2023.
Current report — wording carried from elsewhere
The increase of $10,346 in cost of sales for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was mainly due to an increase in sales. Cost of sales as a percentage of revenue was relatively constant for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023.
Current report — wording carried from elsewhere
Loss from revaluation of contingent consideration
Current report — wording carried from elsewhere
The warrant liability was remeasured to fair value at June 30, 2024 using the Black-Scholes Model. The Company recognized a gain of $1,939 during the six months ended June 30, 2024 as a result of the reduction of the Company's share price from June 30, 2024, as compared to December 31, 2023.
Current report — wording carried from elsewhere
As of June 30, 2024, there was an outstanding principal amount of $5,582 on the two promissory notes. The obligations are subject to restructuring upon the resolution of indemnity claims.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
EBITDA from continuing operations and Adjusted EBITDA from continuing operations for the three months ended March 31, 2024 and 2023: