TerrAscend Corp
For the period ended Dec 31, 2024. Filed Mar 6, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 6, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-14.
0000950170-24-031450
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-06.
0000950170-25-034600
Item 7. 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 256 previous paragraphs and 234 current paragraphs.
123 unchanged; 48 reworded; 58 added; 82 removed; 3 previous and 5 current paragraphs rearranged.
Tables are not compared: 23 previous and 21 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 (58)
Current report
On November 5, 2024, the Company signed a definitive agreement to acquire the assets of Ratio Cannabis LLC, a dispensary located in Goshen Township, Ohio.
Current report
On October 15, 2024, the statute of limitations for the Company’s 2020 amended tax returns expired, which resulted in refunds received of $8,361 being recognized as a tax benefit and no longer recognized as an uncertain tax position.
Current report
On October 1, 2024, the Company paid the outstanding principal amount of the promissory note assumed in connection with the Gage Acquisition of $539 and cancelled the promissory note.
Current report
On August 20, 2024, the Company's Board approved the Share Repurchase Program (as defined below), pursuant to which the Company is authorized to repurchase up to 10 million Common Shares of the Company at any time, or from time to time, over a 12-month period commencing on August 22, 2024 and ending on August 21, 2025.
Current report
On August 13, 2024, the Company paid off and retired two promissory notes issued in connection with the Pinnacle Acquisition (as defined below) with a payment of $5,582.
Current report
On August 1, 2024, the Company entered into the FG Term Loan (as defined below). Proceeds from the FG Term Loan were used to retire the Ilera Term Loan, the Stearns Loan (as defined below), the Chicago Atlantic Term Loan and certain other short-term indebtedness (collectively, the “Retired Loans”), in addition to being used for working capital and general corporate purposes. Each outstanding obligation under the Retired Loans was repaid in full and subsequently terminated.
Current report
On September 30, 2024, the Borrowers and FG Agency Lending LLC, as the Administrative Agent, entered into an amendment to the FG Loan to amend certain schedules and definitions.
Current report
On July 19, 2024, the Company made a prepayment of the Chicago Atlantic Term Loan (as defined below) of $1,500 at par.
Current report
On April 30, 2024, the Company made a prepayment of the Ilera Term Loan of $3,200 at par.
Current report
On January 2, 2024, the Company made a prepayment of the Ilera Term Loan (as defined below) of $4,800 at par.
Current report
Other operating income
Current report
Other operating income primarily represents (gains) losses on lease terminations and (gains) losses on disposal of fixed assets.
Current report
Loss (gain) from revaluation of contingent consideration
Current report
Gain on fair value of derivative liabilities and purchase option derivative assets
Current report
Loss (gain) on extinguishment of debt represents the Company's debt that was retired prior to its scheduled maturity at a different amount than the book value and the amount paid.
Current report
Revenue decreased from $317,328 to $306,677 during the year ended December 31, 2024 as compared to the year ended December 31, 2023 driven by a decline in retail sales in Michigan and New Jersey. The decline in retail sales was related to less foot traffic due to a reduction of discounts and promotions in Michigan related to the Company's ongoing efforts to expand gross margin in the state combined with increased competitive retail landscape pressure in New Jersey. These declines were partially offset by retail and wholesale revenue growth in Maryland due to a full year of adult-use sales in that market, and growth in wholesale in both New Jersey and Pennsylvania.
Current report
Cost of sales was $156,717 or 51% of revenue for the year ended December 31, 2024, remaining relatively flat compared to $156,645 or 50% of revenue for the year ended December 31, 2023.
Current report
General and administrative expense
Current report
The decrease of $3,593 in general and administrative expenses for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily related to a bad debt recovery of $4,188 as well as an insurance recovery of $871.
Current report
During the year ended December 31, 2024, the Company recognized impairment of $39,334 consisting of $17,134 related to Michigan licenses and $22,200 related to the Gage (as defined below) brand name and retail banner. The impairment was primarily driven by declining revenue expectations in Michigan as a result of increased competition. As a result, the Company no longer has any remaining intangible assets associated with its Michigan reporting unit as of December 31, 2024.
Current report
There was no impairment of goodwill recognized during the year ended December 31 ,2024.
Current report
Impairment of property and equipment, and right of use assets
Current report
During the year ended December 31, 2024, the Company recognized impairment of $8,511. The increase of $6,432 for the year ended December 31, 2024, compared to the year ended December 31, 2023 was primarily driven by the impairment of certain owned Michigan and California properties.
Current report
During the year ended December 31, 2023, the Company recognized impairment of $2,079. The increase of $990 for the year ended December 31, 2023, compared to the year ended December 31, 2022 was primarily driven by the impairment of certain Michigan assets in process.
Current report
Other operating income
Current report
During the year ended December 31, 2024, the Company transferred a California lease to a third party, resulting in a lease termination and a recognized gain of $1,169.
Current report
Loss (gain) from revaluation of contingent consideration
Current report
During the year ended December 31, 2024, the Company recognized a loss on extinguishment of debt related to the extinguishment of the Retired Loans, which included the write-off of deferred financing costs.
Current report
During the year ended December 31, 2022, the Company recognized a gain on extinguishment of debt related to the debt settlement arrangement with Canopy USA, in which the Company converted CAD$125,500 in loans and accrued interest into 4,601,467 non-participating non-voting exchangeable shares in the capital of the Company and 22,474,130 new Common Share purchase warrants (see Note 13 included in Item 8,"Financial Statements and Supplementary Data" in this Annual Report for further details. This transaction resulted in a $4,153 gain, reflecting the fair value difference between the settled debt and the consideration issued.
Current report
Gain on fair value of derivative liabilities and purchase option derivative assets
Current report
The derivative liabilities were remeasured to fair value as of December 31, 2024, resulting in a gain of $4,549, primarily due to a decline in the price of the Common Shares during the year.
Current report
The decrease in finance and other expenses for the year ended December 31, 2024, compared to the year ended December 31, 2023, was primarily driven by the refinancing of higher-interest debt and the repayment of certain other debt during the year.
Current report
The reduction in provision for income taxes of $3,015 for the year ended December 31, 2024, compared to December 31, 2023, was primarily due to a decline in gross profit.
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 which was primarily used to retire a majority of the Company's loans coming due within the next year. 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
On August 1, 2024, the Company and TerrAscend USA, Inc., as guarantors, and the Borrowers, and FG Agency Lending LLC, as the Administrative Agent, and certain lenders entered into the FG Loan. The FG Loan provides for a four-year, $140,000 senior-secured term loan whereby the Borrowers borrowed an initial principal amount of $114,000 on August 1, 2024 (the “Initial Draw”) and borrowed the remaining principal amount of $26,000 on September 30, 2024 (the “Delayed Draw”). Net proceeds of the FG Loan were received in an amount equal to 95% of the $140,000.
Current report
The FG Loan bears interest at 12.75% per annum and matures on August 1, 2028 (the "FG Loan Maturity Date"). The FG Loan is guaranteed by the Company and TerrAscend USA, Inc. and is secured by substantially all of the assets of the Borrowers. Depending on the timing of repayment, an exit fee of between 2.0% and 4.0% of the outstanding principal balance of the FG Loan (the "Exit Fee") will be due upon either the date of prepayment or the FG Loan Maturity Date.
Current report
Proceeds from the FG Loan were used to retire the Ilera Term Loan, the Stearns Loan, the Chicago Atlantic Term Loan and certain other short-term indebtedness, in addition to being used for working capital and general corporate purposes. Each outstanding obligation under the Retired Loans was repaid in full and subsequently terminated.
Current report
As of December 31, 2024, there was an outstanding principal amount of $140,000 under the FG Loan.
Current report
In connection with the Peninsula acquisition the acquisition of Blue Ridge and the acquisition of Herbiculture (collectively, the "Maryland Acquisitions"), the Company entered into a series of promissory notes with an aggregate principal amount of $20,625 that bear interest at rates ranging from 7.0% to 10.5% with maturity dates ranging from June 28, 2025 to June 30, 2027.
Current report
As of December 31, 2024, there was an outstanding principal amount of $18,029 under the Maryland Acquisition promissory notes.
Showing the first 40 of 58 passages. Open the source sections for the rest.
Removed paragraphs (82)
Previous report
On January 19, 2023, the Company announced that it entered into a multi-year agreement with Wana Brands ("Wana"), the leading edible manufacturer in North America, to introduce Wana's products at The Apothecarium retail stores and additional third-party retailers in New Jersey. The agreement transferred the manufacturing and sales of Wana's existing portfolio of products in Maryland to the Company. Pursuant to the terms of the agreement between the parties, the Company is the exclusive sole manufacturer, supplier, and commercial partner for Wana's products in New Jersey.
Previous report
On January 27, 2023, the Company completed the acquisition of AMMD.
Previous report
On April 20, 2023, the Company announced that it increased its ownership interest in Cookies Retail Canada Corp. to 95% of the issued and outstanding shares.
Previous report
On May 23, 2023, the Company completed the sale of its facility located in Mississauga, Canada for CAD $19,700 with net proceeds used to pay down existing Company debt.
Previous report
On June 28, 2023, the Company completed the acquisition of Peninsula, a dispensary in Maryland.
Previous report
On June 30, 2023, the Company completed the acquisition of Blue Ridge, a dispensary in Maryland.
Previous report
On June 30, 2023, pursuant to the Ilera Term Loan, WDB PA, a subsidiary of TerrAscend, made a $37,000 paydown payment of its senior secured term loan in Pennsylvania.
Previous report
In June and August 2023, the Company closed a private placement of equity and debt securities which consisted of 6,580,677 equity units at a price of $1.50 per unit for total proceeds of $9,476 and 10,355 senior unsecured convertible debentures at a price of $1,000 per debenture for total gross proceeds of approximately $10,355.
Previous report
On July 1, 2023, the Company commenced adult-use sales in Maryland.
Previous report
On July 4, 2023, the Company commenced trading of its Common Shares on the TSX under the new ticker symbol “TSND”. Subsequently, the ticker symbol on the OTC market was changed to “TSNDF” effective July 6, 2023.
Previous report
On July 10, 2023, the Company completed the acquisition of Herbiculture, a dispensary in Maryland.
Previous report
Subsequent Transactions
Previous report
Definite lived intangible assets are tested for impairment when there are indications that an asset may be impaired. When indicators of impairment exist, the Company performs a quantitative impairment test which compares the carrying value of the assets for intangible assets to their estimated fair values. If the carrying value exceeds the estimated fair value, an impairment is recorded.
Previous report
(Gain) loss on fair value of warrants and purchase option derivative asset
Previous report
Unrealized and realized gain on investments
Previous report
The increase in net revenue from $194,210 to $247,829 for the year ended December 31, 2022 as compared to December 31, 2021 was due to an increase of $96,900 in retail revenue. The increase in retail revenue was mainly due to adult-use sales in New Jersey, which commenced in April of 2022, as well as the Gage and Pinnacle Acquisitions in Michigan. Retail dispensaries increased from thirteen at December 31, 2021 to thirty-one at December 31, 2022. The retail revenue increase was partially offset by a decrease of $43,281 in wholesale revenue from $107,091 at December 31, 2021 to $63,810 at December 31, 2022, which was mainly related to challenging market dynamics in Pennsylvania.
Previous report
The increase in cost of sales for the year ended December 31, 2022 as compared to December 31, 2021 was driven mainly by the Gage Acquisition, as well as an increase in New Jersey due to the increase in adult-use sales which commenced during 2022. The increase in cost of sales as a percentage of revenue was due to lower volumes in Pennsylvania leading to under-absorption, primarily related to lower wholesale flower sales, operational challenges at the Company's cultivation facility in Frederick, Maryland as the Company transitioned to its Hagerstown location, and higher costs of sales as a percentage of revenue as a result of the acquisition of Gage Growth in Michigan.
Previous report
In addition, during the year ended December 31, 2022, the Company wrote down its inventory by $9,082 mainly due to write downs of inventory to lower of cost or market which was related to the Company's operational reconfiguration of its cultivation facility in Pennsylvania and write downs of inventory related to the vape recall in Pennsylvania. During the year ended December 31, 2021, the Company recorded impairment of $2,243 mainly related to inventory at the Company's Pennsylvania operations that did not meet quality standards.
Previous report
General and Administrative Expense (G&A)
Previous report
The increase in G&A expenses for the year ended December 31, 2022 as compared to the year ended December 31, 2021 was primarily due to increased office and general expense of $15,909, increased salary and wages of $14,558, and increased sales and marketing expense of $8,460, which was mainly a result of the Gage and Pinnacle Acquisitions in Michigan.
Previous report
Amortization and Depreciation Expense
Previous report
There were no significant changes in amortization and depreciation expense for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Previous report
The increase in amortization and depreciation expense for the year ended December 31, 2022 as compared to December 31, 2021 was primarily due to the Gage Acquisition and Pinnacle Acquisitions. In connection with such acquisitions, the Company acquired cultivation and processing, as well as retail licenses which are amortized over a 15-year period.
Previous report
The impairment recorded during the year ended December 31, 2021 relates to the write-off of intellectual property at the Company’s Arise business.
Previous report
The impairment recorded during the year ended December 31, 2021 relates to TerrAscend’s Florida reporting unit as the Company determined that the estimated cash flows of the Arise business did not support the carrying value of the intangible assets and goodwill. As a result, the Company recorded impairment to reduce the balance of goodwill at its Florida reporting unit to $nil.
Previous report
TerrAscend recognized a gain on revaluation of contingent consideration of $1,061 for the year ended December 31, 2022 as compared to a loss of $3,584 during the year ended December 31, 2021. During the year ended December 31, 2022, the fair value of the contingent consideration related to the KCR Acquisition was reduced to $nil, as it was determined that it was more likely than not that the earnout criteria would not be met.
Previous report
Gain on extinguishment of debt
Previous report
Pursuant to the Canopy Debt Settlement Arrangement, on December 9, 2022, TerrAscend and certain of its subsidiaries extinguished certain debt obligations with the Canopy USA Entities, including all the principal and interest on the amounts outstanding thereunder, in exchange for 24,601,467 Exchangeable Shares of TerrAscend at a notional price of $3.74 per Exchangeable Share. Additionally, in accordance with Accounting Standards Codification ("ASC") 815 Derivatives and Hedging, the 22,474,130 original warrants to acquire Common Shares of TerrAscend were modified at a weighted average exercise price of $4.45 per Common Share. The Exchangeable Shares and Modified Canopy Warrants were considered in the calculation for extinguishment of the debt obligations, including all principal and interest on the amounts outstanding thereafter (refer to Note 9 included in Item 8, "Financial Statements and Supplementary Data" in this Annual Report on Form 10-K for further details). As a result of these transactions, TerrAscend recorded a gain on extinguishment of debt of $4,153 for the year ended December 31, 2022.
Previous report
Gain on fair value of warrants and purchase option derivative asset
Previous report
The warrant liability was previously remeasured to fair value at December 31, 2022 using the Black-Scholes Model. The Company recognized a gain during the twelve months ended December 31, 2022 as a result of the reduction of the Company's share price from December 31, 2021 as compared to December 31, 2022, as well as from warrants exercised during the twelve months ended December 31, 2022. The combined impact resulted in a gain on fair value of warrants of $59,341 for the twelve months ended December 31, 2022.
Previous report
During the year ended December 31, 2022, the purchase option derivative asset was remeasured to fair value using the Monte Carlo simulation model resulting in a loss of $818.
Previous report
The warrant liability was previously remeasured to fair value at December 31, 2021 using the Black-Scholes Model. TerrAscend recognized a gain during the twelve months ended December 31, 2021 as a result of the reduction of the Common Share price from December 31, 2020 as compared to December 31, 2021, as well as from warrants exercised during the twelve months ended December 31, 2021. The combined impact resulted in a gain on fair value of warrants of $58,158 for the twelve months ended December 31, 2021.
Previous report
For the year ended December 31, 2021, the purchase option derivative asset was remeasured to fair value using the Monte Carlo simulation model resulting in a loss of $254.
Previous report
The increase in finance and other expenses for the year ended December 31, 2022 as compared to the year ended December 31, 2021 was primarily due to an increase of $14,070 in interest expense recognized primarily related to the loans acquired as part of the Gage Acquisition, as well as fees to modify its term loan acquired through the Gage Acquisition and amendment fees related to the Ilera Term Loan, both which did not meet the criteria to be capitalized, totaling $2,507. This increase in finance and other expenses was offset by other income of $9,440 related to an ERC received as a result of the CARES Act which provides for a refundable tax credit for businesses that continued to pay employees while shut down due to the COVID-19 pandemic or had significant declines in gross receipts from March 13, 2020 to December 31, 2021.
Previous report
Transaction and restructuring costs
Previous report
The decrease of transaction and restructuring costs for the year ended December 31, 2023 was primarily related to fees incurred on the Gage and Pinnacle Acquisitions during the year ended December 31, 2022.
Previous report
Similarly, the decrease of transaction and restructuring costs for the year ended December 31, 2022 as compared to December 31, 2021 was related to higher legal costs on the KCR and HMS acquisitions for the year ended December 31, 2021.
Previous report
(Gain) loss on lease termination
Previous report
During the year ended December 31, 2021, the Company entered into a lease termination agreement with the landlord at its 22,000 square foot facility in Frederick, Maryland to enable the Company to terminate the lease prior to the end of the lease term. As a result of the lease termination, the Company recorded a loss on lease termination of $3,278.
Previous report
The change in unrealized foreign exchange (gain) loss from a loss of $712 for the year ended December 31, 2022 to a gain of $53 for the year ended December 31, 2023 was a result of TerrAscend changing its functional currency to U.S. dollars from Canadian dollars in July 2023.
Showing the first 40 of 82 passages. Open the source sections for the rest.
Reworded paragraphs (48)
Previous wording
The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the Company's audited consolidated financial statements as of December 31, 2023 and December 31, 2022 and for the years ended December 31, 2023, December 31, 2022, and December 31, 2021 ("Consolidated Financial Statements") appearing elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to the Company's plans and strategy for its business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth under "Risk Factors" appearing elsewhere in this Annual Report its actual results could differ materially from the results described in or implied by the forward looking information contained in this Annual Report and in the following discussion and analysis.
Current wording
The following discussion and analysis of the financial condition and results of operations of TerrAscend Corp., its subsidiaries, TerrAscend Growth Corp. and its subsidiaries should be read in conjunction with the Company's audited consolidated financial statements as of December 31, 2024 and December 31, 2023 and for the years ended December 31, 2024, December 31, 2023, and December 31, 2022 (the "Consolidated Financial Statements") appearing elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to the Company's plans and strategy for its business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth under "Risk Factors" appearing elsewhere in this Annual Report, the Company's actual results could differ materially from the results described in or implied by the forward-looking information contained in this Annual Report and in the following discussion and analysis.
Previous wording
TerrAscend New Jersey (“TerrAscend NJ”), a majority-owned operation with three dispensaries, and a cultivation/processing facility;
Current wording
TerrAscend NJ, a majority-owned operation with three dispensaries, and a cultivation/processing facility;
Previous wording
TerrAscend Maryland (“TerrAscend MD”), a wholly-owned operation with four dispensaries, and a cultivation/processing facility;
Current wording
TerrAscend MD, a wholly-owned operation with four dispensaries, and a cultivation/processing facility;
Previous wording
TerrAscend Pennsylvania (“TerrAscend PA”), a wholly-owned operation with six dispensaries, and a cultivation/processing facility;
Current wording
TerrAscend PA, a wholly-owned operation with six dispensaries, and a cultivation/processing facility;
Previous wording
TerrAscend Michigan (“TerrAscend MI”), a wholly-owned operation with nineteen dispensaries, and three cultivation/processing facilities;
Current wording
TerrAscend MI, a wholly-owned operation with twenty dispensaries, one cultivation facility, one processing facility, and two cultivation/processing facilities;
Previous wording
TerrAscend California (“TerrAscend CA”), a wholly-owned operation with five dispensaries, and a cultivation facility; and;
Current wording
TerrAscend CA, a wholly-owned operation with four dispensaries, and a cultivation facility; and;
Previous wording
TerrAscend Canada (“TerrAscend Canada”) is a cannabis retailer in Ontario, Canada with a majority-owned dispensary in Toronto, Ontario, Canada ("Cookies Canada").
Current wording
TerrAscend Canada, a cannabis retailer in Ontario, Canada with a majority-owned dispensary in Toronto, Ontario, Canada.
Previous wording
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 $1,375 in stock. 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.
Current wording
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 the issuance of an aggregate of 782,539 Common Shares. The Company also acquired the remaining 50.1% equity interest in three Apothecarium-branded 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 wording
General and administrative ("G&A") expenses consist primarily of personnel costs related to finance, human resources, legal, certain royalties, and other administrative functions. Additionally, G&A expenses include professional fees to third parties, as well as marketing expenses. Moreover, G&A expenses includes share-based compensation on options, restricted stock units and warrants. The Company expects that G&A expenses will increase in absolute dollars as the business grows.
Current wording
General and administrative ("G&A") expenses consist primarily of personnel costs related to finance, human resources, legal, certain royalties, and other administrative functions. Additionally, G&A expenses include professional fees to third parties, as well as marketing expenses. Moreover, G&A expenses include share-based compensation on options, restricted share units and warrants. The Company expects that G&A expenses will increase in absolute dollars as the business grows.
Previous wording
Goodwill and indefinite lived intangible assets are reviewed for impairment annually and whenever there are events or changes in circumstances that indicate that the carrying amount has been impaired. The Company first performs a qualitative assessment. If based on the results of a qualitative assessment it has been determined that it is more likely than not that the fair value of a reporting unit exceeds its carrying value, an additional quantitative impairment test is performed which compares the carrying value of the reporting unit to its estimated fair value. If the carrying value exceeds the estimated fair value, an impairment is recorded.
Current wording
Goodwill and indefinite lived intangible assets are reviewed for impairment annually and whenever there are events or changes in circumstances that indicate that the carrying amount has been impaired. The Company first performs a qualitative assessment. If based on the results of a qualitative assessment it has been determined that it is more likely than not that the carrying value of a reporting unit exceeds its fair value, an additional quantitative impairment test is performed which compares the carrying value of the reporting unit to its estimated fair value. If the carrying value exceeds the estimated fair value, an impairment is recorded.
Previous wording
The Company evaluates the recoverability of property and equipment whenever events or changes in circumstances indicate that the carrying value of the asset, or asset group, may not be recoverable. When the Company determines that the carrying value of the long-lived asset may not be recoverable based upon the existence of one or more indicators, the assets are assessed for impairment based on the estimate of future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the carrying value of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying value over its fair value.
Current wording
The Company evaluates the recoverability of definite lived assets based on whether events or changes in circumstances indicate that the carrying value of the asset, or asset group, may not be recoverable. The assets, or asset group, are assessed for impairment based on the estimate of future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the undiscounted cash flows are less than the carrying value, the Company measures the fair value of the asset group. If the carrying value of an asset group exceeds its fair value, an impairment loss is recorded for the excess of the asset group’s carrying value over its estimated fair value.
Previous wording
The Company issues warrant liability that are remeasured to fair value at the end of each reporting unit using the Black-Scholes Option Pricing Model ("Black-Scholes Model"). A gain or loss is recognized as a result of the revaluation.
Current wording
The Company issues warrants that are remeasured to fair value at the end of each reporting period using the Black-Scholes Option Pricing Model (the "Black-Scholes Model"). A gain or loss is recognized as a result of the revaluation.
Previous wording
Finance and other expenses consist primarily of interest expense on the Company's outstanding debt obligations.
Current wording
Finance and other expenses consist primarily of interest and accretion expense on the Company's outstanding debt obligations.
Previous wording
Unrealized and realized foreign exchange loss
Current wording
Unrealized and realized foreign exchange loss (gain)
Previous wording
Unrealized and realized foreign exchange loss represents the loss recognized on the remeasurement of USD denominated cash and other assets recorded in the Canadian dollars functional currency at the Company's Canadian operations.
Current wording
Unrealized and realized foreign exchange loss (gain) represents the loss recognized on the remeasurement of U.S. dollar ("USD") denominated cash and other assets recorded in the Canadian dollars ("CAD") functional currency at the Company's Canadian operations.
Previous wording
Revenue increased from $247,829 to $317,328 during the year ended December 31, 2023 as compared to the year ended December 31, 2022 driven by an increase of $55,938 in retail revenue and $13,561 in wholesale revenue. The increase was primarily a result of growth from adult-use sales in New Jersey and implementation of adult-use sales in Maryland during 2023, along with the acquisitions of AMMD, Peninsula, Blue Ridge, and Herbiculture in Maryland.
Current wording
Revenue increased from $247,829 to $317,328 during the year ended December 31, 2023 as compared to the year ended December 31, 2022 driven by an increase of $55,938 in retail revenue and $13,561 in wholesale revenue. The increase was primarily a result of growth from adult-use sales in New Jersey and implementation of adult-use sales in Maryland during 2023, along with the acquisitions of AMMD (as defined below), Peninsula, Blue Ridge (as defined below), and Herbiculture (as defined below) in Maryland.
Previous wording
The decrease in G&A expenses for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily driven by a bad debt expense of $10,331 taken in 2022 offset by an increase in G&A expenses in 2023 primarily due to acquisitions in Maryland and the implementation of adult-use sales in the state.
Current wording
The decrease in general and administrative expenses for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily driven by a bad debt expense of $10,331 taken in 2022 offset by an increase in general and administrative expenses in 2023 primarily due to acquisitions in Maryland and the implementation of adult-use sales in the state.
Previous wording
During the year ended December 31, 2023, the Company performed an impairment analysis over its definite lived retail licenses in California and determined that its carrying value was greater than its fair value, and therefore, recorded impairment of $15,518. In the Michigan market, during each of the years ended December 31, 2023 and 2022, the Company performed an impairment analysis over its indefinite lived intangible assets acquired through the Gage Acquisition as the changes in the market expectations of cash flows as well as increased competition and supply in the state were determined to be indicators of impairment. As a result of the impairment analysis performed in 2023, the Company determined that it was more likely than not that the carrying value of the Gage brand name and Gage banner was greater than its fair value, and therefore, recorded impairment of $34,185 and $ 1,600 for Gage brand name and Gage banner, respectively.
Current wording
During the year ended December 31, 2023, the Company performed an impairment analysis over its definite lived retail licenses in California and determined that its carrying value was greater than its fair value, and therefore, recorded impairment of $15,518. In the Michigan market, during each of the years ended December 31, 2023 and December 31, 2022, the Company performed an impairment analysis over its indefinite lived intangible assets acquired through the Gage Acquisition (as defined below) as the changes in the market expectations of cash flows as well as increased competition and supply in the state were determined to be indicators of impairment. As a result of the impairment analysis performed in 2023, the Company determined that it was more likely than not that the carrying value of the Gage brand name and Gage retail banner was greater than its fair value, and therefore, recorded impairment of $34,185 and $ 1,600 for the Gage brand name and Gage retail banner, respectively.
Previous wording
During the year ended December 31, 2022, as it was determined that it was more likely than not that the Michigan reporting unit's fair value was less than its carrying value, a one-step goodwill quantitative impairment test was performed. As a result of the quantitative test, TerrAscend recorded impairment of goodwill of $170,357 related to the Gage Acquisition and Pinnacle Acquisition, reducing the carrying value of goodwill within the Michigan reporting unit, to $nil.
Current wording
During the year ended December 31, 2022, as it was determined that it was more likely than not that the Michigan reporting unit's fair value was less than its carrying value, a one-step goodwill quantitative impairment test was performed. As a result of the quantitative test, the Company recorded impairment of goodwill of $170,357 related to the Gage Acquisition and Pinnacle Acquisition, reducing the carrying value of goodwill within the Michigan reporting unit, to zero.
Previous wording
(Gain) loss from revaluation of contingent consideration
Current wording
During the year ended December 31, 2024, the Company recognized a loss from revaluation of contingent consideration of $2,465, an increase in loss of $3,110 for the year ended December 31, 2024, compared to the year ended December 31, 2023. The increase in loss was primarily driven by a decrease in TerrAscend's share price, partially offset by the expiration of the contingent consideration in connection with the Peninsula Acquisition on June 28, 2023.
Previous wording
For the year ended December 31, 2023, TerrAscend recognized a gain of $645 due to a reduction in the contingent liability for the Peninsula Acquisition, which was a result of the increase in TerrAscend's share price from the grant date.
Current wording
For the year ended December 31, 2023, the Company recognized a gain of $645 due to a reduction in the contingent liability in connection with the Peninsula Acquisition, which was a result of the increase in the price of the Common Shares from the grant date.
Previous wording
The warrant liability was remeasured to fair value at December 31, 2023 using the Black-Scholes Model. TerrAscend recognized a gain of $372 during the year ended December 31, 2023 as a result of the declining share price from the warrant issuance date, as compared to December 31, 2023. During the year ended December 31, 2023, the purchase option derivative asset expired and was recorded as a loss of $50.
Current wording
The warrant liability was remeasured to fair value as of December 31, 2023, using the Black-Scholes Model. The Company recognized a gain of $322 for the year ended December 31, 2023, primarily due to a decline in share price since the warrant issuance date. Additionally, the purchase option derivative asset expired during the year, resulting in a recorded loss of $50.
Previous wording
The increase in tax expense for the year ended December 31, 2023 as compared to December 31, 2022 is primarily related to decreases in the pre-tax book loss due to operational results compared to December 31, 2022, as well as the goodwill impairment that reduced tax expense for the Company in 2022. The Company's effective tax rate was (40.0)% for the year ended December 31, 2023, as compared to 3.5% for the year ended December 31, 2022. The Company's effective tax rate for the year ended December 31, 2023 was higher than the federal statutory tax rate of 21% primarily driven by the impact of Section 280E of the Code on the Company’s taxes due.
Current wording
The increase in provision for income taxes for the year ended December 31, 2023 as compared to December 31, 2022 was primarily related to decreases in the pre-tax book loss due to operational results compared to December 31, 2022, as well as the goodwill impairment that reduced tax expense for the Company in 2022. The Company's effective tax rate was (40.0)% for the year ended December 31, 2023, as compared to 3.5% for the year ended December 31, 2022. The Company's effective tax rate for the year ended December 31, 2023 was higher than the federal statutory tax rate of 21% primarily driven by the impact of Section 280E of the Code on the Company’s taxes due.
Previous wording
Since its inception, the Company's primary sources of capital have been through the issuance of equity securities or debt facilities, and the Company has received aggregate net proceeds from such transactions totaling $653,006 as of December 31, 2023.
Current wording
Since its inception, the Company's primary sources of capital have been through the issuance of equity securities or debt facilities, and the Company has received aggregate net proceeds from such transactions totaling $782,388 as of December 31, 2024.
Previous wording
The Company has $206,453 in principal amounts of loans payable at December 31, 2023. Of this amount, $141,946 are due in the next twelve months.
Current wording
The Company has $204,545 in principal amounts of loans payable at December 31, 2024. Of this amount, $8,106 in principal are due in 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 $94,618 in lease obligations. Of this amount, $9,506 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 $88,003 in lease obligations. Of this amount, $9,433 of lease payments are due in the next twelve months.
Previous wording
The Company's undiscounted contingent consideration payable is $6,446 at December 31, 2023, all of which is due in the next twelve months. The contingent consideration payable relates to the Apothecarium 2019 Acquisition, State Flower Acquisition, and Peninsula Acquisition. Contingent consideration is based upon the potential earnout of the underlying business unit and is measured at fair value using a projection model for the business and the formulaic structure for determining the consideration under the agreement. The contingent consideration is revalued at the end of each reporting period. The contingent considerations of State Flower and Apothecarium 2019 Acquisitions were paid to the sellers on January 19, 2024.
Current wording
The Company's undiscounted contingent consideration payable is $3,293 at December 31, 2024, of which, $3,121 is due in the next twelve months. The contingent consideration payable relates to the Company's acquisition of 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 December 31, 2023, the Company had accounts payable and accrued liabilities of $49,897 and corporate income taxes payable of $4,775.
Current wording
At December 31, 2024, the Company had accounts payable and accrued liabilities of $46,725 and corporate income taxes payable of $11,531.
Previous wording
On October 11, 2022, subsidiaries of TerrAscend, among others, entered into a loan agreement with Pelorus for the single-draw senior secured Pelorus Term Loan in an aggregate principal amount of $45,478. The Pelorus Term Loan bears interest at a variable rate tied to the one month SOFR, subject to a base rate, plus 9.5%, with interest-only payments for the first 36 months. The base rate is defined as, on any day, the greatest of (a) 2.5%, (b) the effective federal funds rate in effect on such day plus 0.5%, and (c) SOFR in effect on such day. The obligations of the borrowers under the Pelorus Term Loan are guaranteed by the Company, TerrAscend USA and certain other subsidiaries of TerrAscend and are secured by all of the assets of the Company's Maryland and New Jersey businesses, including certain real estate in Maryland and New Jersey, but excludes all Maryland dispensaries. The Pelorus Term Loan matures on October 11, 2027.
Current wording
On October 11, 2022, subsidiaries of, TerrAscend, among others, entered into the Pelorus Term Loan with Pelorus, in an aggregate principal amount of $45,478. The Pelorus Term Loan is based on a variable rate tied to one month SOFR, subject to a base rate, plus 9.5%, with interest-only payments for the first 36 months and matures on October 11, 2027. The base rate is defined as, on any day, the greatest of: (i) 2.5%, (b) the effective federal funds rate in effect on such day plus 0.5%, and (c) one month SOFR in effect on such day. The obligations of the borrowers under the Pelorus Term Loan are guaranteed by the Company, TerrAscend USA and certain other subsidiaries of the Company and are secured by all of the assets of TerrAscend's New Jersey businesses and certain assets of TerrAscend's Maryland business, including certain real estate in Maryland. The Pelorus Term Loan is not secured by any of the MD dispensaries.
Previous wording
On June 22, 2023, TerrAscend NJ, LLC further agreed to an amendment to the Pelorus Term Loan to permit the Company to incur certain indebtedness. This amendment was not considered an extinguishment of debt under ASC 470, Debt. As of December 31, 2023, there was an outstanding principal amount of $45,478 under the Pelorus Term Loan.
Current wording
On April 17, 2023, TerrAscend NJ agreed to an amendment to the Pelorus Term Loan to, among other things: (i) permit changes necessary for the TSX Transaction (as defined in the Pelorus Term Loan), and (ii) waive certain tax provisions. On June 22, 2023, TerrAscend NJ agreed to a further amendment to the Pelorus Term Loan to permit the Company to incur certain indebtedness. This amendment was not considered an extinguishment of debt under ASC 470 Debt.
Previous wording
In connection with the Gage Acquisition, the Company assumed the senior secured term loan Chicago Atlantic Term Loan, with an acquisition date fair value of $53,857. The credit agreement bears interest at a rate equal to the greater of (i) the Prime Rate plus 7% or (ii) 10.25%. The term loan was payable monthly and had a maturity date of November 30, 2022. The Chicago Atlantic Term Loan was secured by a first lien on all Gage Growth assets. As a result of the amendment, the Company paid a loan amendment fee of $1,109 which was capitalized.
Current wording
In connection with the Gage Acquisition, the Company assumed a senior secured term loan (the "Chicago Atlantic Term Loan") with an acquisition date fair value of $53,857. The credit agreement bore interest at a rate equal to the greater of (i) the Prime Rate plus 7% or (ii) 10.25%. The Chicago Atlantic Term Loan was payable monthly and had a maturity date of November 30, 2022. The Chicago Atlantic Term Loan was secured by a first lien on all Gage's assets.
Previous wording
On December 18, 2020, WDB Holding PA, a subsidiary of TerrAscend, entered into the Ilera Term Loan, a senior secured term loan with a syndicate of lenders in the amount of $120,000. The Ilera Term Loan is solely secured by Ilera. The Ilera Term Loan bears interest at 12.875% per annum and matures on December 17, 2024. Subject to certain conditions of the agreement, the Company has the ability to increase the facility by up to $30,000. WDB Holding PA's obligations under the Ilera Term Loan and related transaction documents are guaranteed by the Company, TerrAscend USA, Inc. ("TerrAscend USA"), and certain subsidiaries of WDB Holding PA, and secured by TerrAscend USA's equity interest in WDB Holding PA and substantially all of the assets of WDB Holding PA and the subsidiary guarantors party thereto. The loan can be refinanced at the option of the WDB Holding PA after 18 months from the closing date subject to a premium payment due. Of the total proceeds received, $105,767 was used to satisfy the remaining Ilera earn-out payments.
Current wording
On December 18, 2020, WDB PA, a subsidiary of TerrAscend, entered into a senior secured term loan with a syndicate of lenders in the amount of $120,000 ("Ilera Term Loan"). The Ilera Term Loan was solely secured by the Company’s Pennsylvania-based Ilera. The Ilera Term Loan bore interest at 12.875% and was set to mature on December 17, 2024.
Previous wording
On January 2, 2024, the Company made a prepayment of the Ilera Term Loan of $4,800 at 100% to par.
Current wording
On January 2, 2024, the Company completed a prepayment of the Ilera Term Loan of $4,800 at the prepayment price of 100% to par. On April 30, 2024, the Company made a prepayment of $3,200 of the Ilera Term Loan, at the prepayment price of 100% to par. In accordance with ASC 470, Debt, these amendments were not considered extinguishment of debt.
Previous wording
On June 26, 2023, the Company entered into the Stearns Loan, a $25,000 commercial loan with Stearns Bank, which is secured by the Company’s cultivation facility in Pennsylvania and its AMMD dispensary in Cumberland, Maryland. The Stearns Loan bears interest at a rate of prime plus 2.25% and matures on December 26, 2024. As part of the Stearns Loan, the Company is required to hold $2,500 on deposit in a restricted account. The proceeds from the Stearns Loan were used to pay down the Company's higher interest rate Ilera Term Loan, thereby lowering its overall interest expense.
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 AMMD dispensary in Cumberland, Maryland (the "Stearns Loan"). The Stearns Loan bore an interest rate of prime plus 2.25% and was set to mature on December 26, 2024.
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 December 31, 2023, 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
In connection with the Pinnacle Acquisition, the Company entered into two promissory notes in an aggregate amount of $10,000 (the "Pinnacle Promissory Notes") to pay down all Pinnacle liabilities and encumbrances. Each of the Pinnacle Promissory Notes was set to mature on June 30, 2023 and bore an interest rate of 6%. On June 27, 2023, Spartan Partners Properties, LLC, agreed to an amendment to the Pinnacle Promissory Notes to, among other things, that extended the obligation date of the Pinnacle Promissory Notes until December 1, 2023. On August 13, 2024, the Company paid the outstanding principal amount of $5,582 and retired the Pinnacle Promissory Notes.
Previous wording
In connection with the Reorganization (see Note 3), TerrAscend Growth Corp. ("TerrAscend") issued $1,000 of Class A shares with a 20% guaranteed annual dividend ("Class A Shares") to an investor (the “Investor”) pursuant to the terms of a subscription agreement between TerrAscend and the Investor dated April 20, 2023 (the “Subscription Agreement”). Pursuant to the terms of the Subscription Agreement, TerrAscend holds a call right to repurchase all of the Class A Shares issued to the Investor for an amount equal to the sum of: (a) the Repurchase/Put Price (as defined in the Subscription Agreement); plus (b) the amount equal to 40% of the subscription amount less the aggregate dividends paid to the Investor as of the date of the exercise of the option. In addition, the Investor holds a put right that is exercisable at any time after four months’ advanced written notice following the five-year anniversary of the closing of the investment to put all (and only all) of the Class A Shares owned by the Investor to TerrAscend at the Repurchase/Put Price, payable in cash or shares. The instrument is considered as a debt for accounting purposes due to the economic characteristics and risks. As of December 31, 2023, there was an outstanding principal amount of $1,000.
Current wording
In connection with the Reorganization, TerrAscend issued $1,000 of class A shares (the "Class A Shares") with a 20% guaranteed annual dividend to an investor (the “Investor”) pursuant to the terms of a subscription agreement between TerrAscend and the Investor dated April 20, 2023 (the “Subscription Agreement”). Pursuant to the terms of the Subscription Agreement, TerrAscend holds a call right to repurchase all of the Class A Shares issued to the Investor for an amount equal to the sum of: (a) the Repurchase/Put Price (as defined in the Subscription Agreement); plus (b) the amount equal to 40% of the subscription amount less the aggregate dividends paid to the Investor as of the date of the exercise of the option. In addition, the Investor holds a put right that is exercisable at any time after four months’ advanced written notice following the five-year anniversary of the closing of the investment to put all (and only all) of the Class A Shares owned by the Investor to TerrAscend at the Repurchase/Put Price, payable in cash or shares. The instrument is considered as a debt for accounting purposes due to the economic characteristics and risks. As of December 31, 2024, there was an outstanding principal amount of $1,000.
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 December 31, 2023, there was an outstanding principal amount of $1,698 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 $4,500, which was set to mature on January 1, 2025. The promissory note bore interest at a rate of 6%. On October 1, 2024, the Company paid the outstanding principal amount of $539 and retired the promissory note.
Previous wording
On June 26, 2023, the Company acquired the minority interest in IHC Real Estate LP and in connection therewith, the Company entered into a promissory note in the amount of $7,500. The promissory note bore interest at a 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. As of December 31, 2023, there was an outstanding principal amount of $5,000 under the promissory note.
Current wording
On June 26, 2023, the Company acquired a minority equity interest in IHC Real Estate LP, and in connection therewith, the Company entered into a promissory note in the amount of $7,500. The promissory note bore interest at a rate of 15% and matured on January 15, 2024. On June 28, 2023 and July 31, 2023, the Company made payments of $1,500 and $1,000, respectively.
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 good will 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 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) EBITDA from continuing operations and Adjusted EBITDA from continuing operations as net loss, adjusted to exclude provision for income taxes, finance expenses, depreciation and amortization, share-based compensation, loss on extinguishment of debt, loss (gain) from revaluation of contingent consideration, loss (gain) on disposal of fixed assets, impairment of property and equipment and right of use assets, bad debt recovery, unrealized and realized loss on investments, (gain) loss on lease termination and derecognition of finance lease, unrealized and realized foreign exchange, gain on fair value of derivative liabilities and purchase option derivative assets, Employee Retention Credits and Transfer Fee, and certain other items, which management believes is not reflective of the ongoing operations and performance of the Company. 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) income to EBITDA from continuing operations and Adjusted EBITDA from continuing operations for the years ended December 31, 2023, December 31, 2022, and December 31, 2021:
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 years ended December 31, 2024, December 31, 2023, and December 31, 2022:
Showing the first 40 of 48 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Current report — wording carried from elsewhere
The Company evaluates the recoverability of property and equipment based on whether events or changes in circumstances indicate that the carrying value of the asset, or asset group, may not be recoverable. The assets, or asset group, are assessed for impairment based on the estimate of future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the undiscounted cash flows are less than the carrying value, the Company measures the fair value of the asset group. In certain circumstances, an appraisal was obtained to determine the fair value of certain long-lived assets. If the carrying value of an asset group exceeds its fair value, an impairment loss is recorded for the excess of the asset group’s carrying value over its estimated fair value.
Current report — wording carried from elsewhere
Loss (gain) on extinguishment of debt
Current report — wording carried from elsewhere
Loss (gain) on extinguishment of debt
Current report — wording carried from elsewhere
As of December 31, 2024, there was an outstanding principal amount of $45,478 under the Pelorus Term Loan.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
(Gain) loss from revaluation of contingent consideration
Previous report — wording carried elsewhere
Unrealized and realized foreign exchange (gain) loss
Previous report — wording carried elsewhere
The decrease in tax expense for the year ended December 31, 2022 as compared to December 31, 2021 is primarily related to the pre-tax book loss due to the impairment of goodwill taken during the year ended December 31, 2022. The Company's effective tax rate was 3.5% for the year ended December 31, 2022, as compared to 64.8% for the year ended December 31, 2021. The Company's effective tax rate for the year ended December 31, 2022 was lower than the federal statutory tax rate of 21% primarily driven by the impairment of goodwill and the increase in the valuation allowance.