TerrAscend Corp.
For the period ended Mar 31, 2025. Filed May 8, 2025.
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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.
Mar 31, 2025 · Filed May 8, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0000950170-24-122252
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0000950170-25-066902
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 196 previous paragraphs and 125 current paragraphs.
66 unchanged; 38 reworded; 17 added; 88 removed; 4 previous and 4 current paragraphs rearranged.
Tables are not compared: 24 previous and 16 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 (17)
Current report
On May 6, 2025, the Company and a consolidated entity completed the acquisition of certain assets of Ratio Cannabis LLC ("Ratio Cannabis"), a dispensary in Ohio. Under the terms of the purchase agreements entered into in connection with the acquisition, each dated as of March 14, 2025, the Company and a consolidated entity acquired certain assets of Ratio Cannabis for total consideration of $10,300, which was comprised of $5,000 in cash, $1,320 in Common Shares and a seller’s note for $3,980 bearing 6% interest with a two-year maturity. The number of Common Shares issued as part of the consideration was calculated based on the twenty (20)-day volume-weighted average price of the Common Shares on the OTCQX for the period ending on May 5, 2025, resulting in the issuance of 4,570,637 Common Shares by the Company on May 6, 2025.
Current report
On May 5, 2025, the Company signed an option agreement to acquire equity interests in, and fully operate, Union Chill Cannabis Company LLC, a dispensary in New Jersey for total consideration of $13,000, which will be comprised of $4,000 in cash and a convertible promissory note for $9,000. The transaction is subject to customary closing conditions and regulatory approvals.
Current report
Cost of sales
Current report
Loss from revaluation of contingent consideration
Current report
Unrealized and realized foreign exchange loss
Current report
Provision for income taxes
Current report
Cost of sales
Current report
The decrease of $1,628 in general and administrative expense for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, is primarily due to the Company's continued operating expense reduction initiative, which drove lower professional fees and reduced sales and marketing costs.
Current report
Loss from revaluation of contingent consideration
Current report
The (gain) loss from fair value of derivative liabilities and purchase option derivative assets for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 decreased due to the reduction of TerrAscend's share price which is a key input in the valuation of the instrument.
Current report
The unrealized and realized loss on investments for the three months ended March 31, 2025 relates to the write-off of an investment that was deemed no longer recoverable.
Current report
Provision for income taxes
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 10.75% with maturity dates ranging from June 28, 2025 to June 30, 2027.
Current report
The decrease of $5,247 in net cash provided by operating activities for the three months ended March 31, 2025 as compared to three months ended March 31, 2024 is primarily driven by a reduction in accounts payables and an increase in income taxes paid.
Current report
The decrease of $139 in net cash used in investing activities for the three months ended March 31, 2025 as compared to three months ended March 31, 2024 is primarily driven by a reduction in capital expenditures.
Current report
The decrease of $7,264 in net cash used in financing activities for the three months ended March 31, 2025 as compared to three months ended March 31, 2024 is primarily driven by fewer loan principal payments due during the three months ended March 31, 2025 as a result of debt refinancing and paydowns completed in 2024.
Current report
Adjusted EBITDA was relatively flat for the three months ended March 31, 2025 as compared to three months ended March 31, 2024.
Removed paragraphs (88)
Previous report
Recent Developments
Previous report
On July 19, 2024, the Company made a prepayment of the Chicago Atlantic Term Loan of $1,500 at par.
Previous report
On August 1, 2024, the Company and TerrAscend USA, Inc., as guarantors, and each of WDB Holding CA, Inc., WDB Holding PA, Inc., Moose Curve Holdings, LLC, Hempaid, LLC and, pursuant to a joinder agreement dated September 30, 2024, WDB Holding MI, Inc., including certain of each of their respective subsidiaries, as borrowers (collectively, the “Borrowers”), and FG Agency Lending LLC, as the Administrative 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, of $114,000 (the “Initial Draw”) and a delayed draw on September 30, 2024 of $26,000 (the “Delayed Draw”). Proceeds from the FG Loan were used to retire the Ilera Term Loan, the Stearns Loan, the Chicago Atlantic Term Loan and certain other 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. The FG Loan is guaranteed by the Company and TerrAscend USA, Inc. and is secured by substantially all of the assets of the Borrowers. 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.
Previous report
On August 13, 2024, the Company paid off and retired two promissory notes from the Pinnacle Acquisition with a payment of $5,582.
Previous report
On August 20, 2024, the Company's board of directors (the "Board") approved a share repurchase program, which authorized the Company to repurchase up to 10 million common shares of the Company at any time, or from time to time, from August 22, 2024 until August 21, 2025. During the third quarter of 2024, the Company repurchased 107,400 common shares under the share repurchase program for total consideration of approximately $133. As of September 30, 2024, the Company had a total of 9,892,600 shares remaining that can be authorized for repurchase.
Previous report
On October 1, 2024, the Company paid the outstanding principal amount of the Stadium Ventures Note of $539 and retired the promissory note.
Previous 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.
Previous report
On November 5, 2024, the Company signed a definitive agreement providing it the option to acquire the assets of Ratio Cannabis LLC, a dispensary in Ohio.
Previous report
Impairment of intangible assets and goodwill
Previous report
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.
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
The Company evaluates the recoverability of property and equipment and right of use assets 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.
Previous report
Other operating expense (income)
Previous report
Other operating expense (income) primarily represents (gains) losses on lease terminations and (gains) losses on disposal of fixed assets.
Previous report
Transaction and restructuring costs
Previous report
Transaction costs include costs incurred in connection with the Company's acquisitions, such as expenses related to professional fees, consulting, legal and accounting. Restructuring costs are those costs associated with severance and restructuring of business units.
Previous report
Loss 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.
Previous report
The increase of $2,253 in general and administrative expense for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, is primarily related to an increase in stock-based compensation due to a one-time modification for option expiry from five years to ten years. This was offset by a reduction in headcount.
Previous report
The warrant liability was remeasured to fair value at September 30, 2024 using the Black-Scholes Model. The Company recognized a gain of $669 during the three months ended September 30, 2024 as a result of the reduction of the Company's share price.
Previous report
During the three months ended September 30, 2023, the Company recognized a loss on fair value warrants of $3,217 as a result of the reduction of the Company's share price.
Previous report
Other operating expense (income)
Previous report
During the three months ended September 30, 2024, Other operating expense (income) increased as compared to the three months ended September 30, 2023, primarily due to the derecognition of the Company's financial obligations and underlying assets in the third quarter of 2023.
Previous report
During the three months ended September 30, 2024, Loss on extinguishment of debt increased as compared to the three months ended September 30, 2023, primarily due to extinguishment of the majority of the Company's debt in relation to the FG Loan which included write-offs of deferred financing costs.
Previous report
Results from Operations - Nine Months Ended September 30, 2024 and September 30, 2023
Previous report
Revenue increased from $230,762 to $232,324 for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 primarily driven by the implementation of adult-use sales in Maryland and the Company's four Maryland acquisitions in 2023 combined with growth in wholesale across Pennsylvania, New Jersey, and Maryland, partially offset by retail declines in New Jersey and Michigan.
Previous report
The increase of $6,863 in cost of sales for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 was mainly due to an increase in sales and an increase in cost of sales as a percentage of revenue. Cost of sales as a percentage of revenue for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023 increased primarily due to higher input costs and higher costs per pound, which reduced gross profit margins.
Previous report
General and administrative expense
Previous report
The decrease of $3,885 in general and administrative expense for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, is primarily related to a bad debt recovery of $4,188 as well as an insurance recovery of $871.
Previous report
The loss from the revaluation of contingent consideration for the nine months ended September 30, 2024 as compared to the gain from the revaluation of contingent consideration nine months ended September 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.
Previous report
The warrant liability was remeasured to fair value at September 30, 2024 using the Black-Scholes Model. The Company recognized a gain of $2,608 during the nine months ended September 30, 2024 as a result of the reduction of the Company's share price.
Previous report
During the nine months ended September 30, 2023, the Company recognized a loss on fair value warrants of $2,564 as a result of the increase of the Company's share price.
Previous report
During the nine months ended September 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 report
During the nine months ended September 30, 2024, Loss on extinguishment of debt increased as compared to the nine months ended September 30, 2023, due to extinguishment of the majority of the Company's debt in relation to the FG Loan which included write-offs of deferred financing costs.
Previous report
The provision for income taxes from $32,655 for the nine months ended September 30, 2023 increased to $34,773 for the nine months ended September 30, 2024 primarily due to an adjustment reflecting the impact of limitations on interest deductibility along with accrued interest and penalties related to the 280E Tax Position in 2024.
Previous report
Liquidity and going concern
Previous 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. During the period ended on September 30, 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. See Note 10 for more information regarding the refinancing.
Previous 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.
Previous report
Capital requirements
Previous 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 (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.
Previous 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.
Showing the first 40 of 88 passages. Open the source sections for the rest.
Reworded paragraphs (38)
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 and nine months ended September 30, 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 months ended March 31, 2025 and 2024 and the accompanying notes for each respective period.
Previous wording
The Company is a leading North American cannabis company. The Company has vertically integrated licensed operations in Pennsylvania, New Jersey, Michigan, Maryland and California. In addition, the Company has retail operations in Ontario, Canada with a majority-owned dispensary in Toronto, Ontario, Canada. Notwithstanding the fact that various states in the U.S. have implemented medical marijuana laws or have otherwise legalized the use of cannabis, the use of cannabis remains illegal under U.S. federal law for any purpose, by way of the Controlled Substances Act of 1970.
Current wording
The Company is a leading North American cannabis company. The Company has vertically integrated licensed operations in Pennsylvania, New Jersey, Michigan, Maryland and California. In addition, the Company has retail operations in Ontario, Canada with a majority-owned dispensary in Toronto, Ontario, Canada. Notwithstanding the fact that various states in the United States have implemented medical marijuana laws or have otherwise legalized the use of cannabis, the use of cannabis remains illegal under U.S. federal law for any purpose, by way of the Controlled Substances Act of 1970.
Previous wording
The Company operates under one operating segment, which is the cultivation, production and sale of cannabis products.
Current wording
The Company operates under one reportable segment, which is the cultivation, production and sale of cannabis products.
Previous wording
TerrAscend Michigan (“TerrAscend MI”), a wholly-owned operation with twenty dispensaries, and three cultivation and processing facilities;
Current wording
TerrAscend Michigan (“TerrAscend MI”), a wholly-owned operation with twenty dispensaries, one cultivation facility, one processing facility, and two cultivation/processing facilities;
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 stock units and warrants. The Company expects that G&A expenses will increase in absolute dollars as the business grows.
Previous wording
Unrealized and realized (gain) loss on investments
Current wording
(Gain) loss on fair value of derivative liabilities and purchase option derivative assets
Previous wording
The Company issues warrants that are remeasured to fair value at the end of each reporting unit using the Black-Scholes Option Pricing 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 unit using the Black-Scholes Model. A gain or loss is recognized as a result of the revaluation.
Previous wording
Unrealized and realized foreign exchange (gain) loss represents the (gain) 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 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.
Previous wording
Unrealized and realized foreign exchange (gain) loss
Current wording
Unrealized and realized loss on investments
Previous wording
The Company accounts for its investment in equity securities without readily determinable fair values using a valuation technique which maximizes the use of relevant observable inputs, with subsequent holding changes in fair value recognized in unrealized gain or loss on investments in the Consolidated Statement of Comprehensive Loss.
Current wording
The Company accounts for its investment in equity securities without readily determinable fair values using a valuation technique which maximizes the use of relevant observable inputs, with subsequent holding changes in fair value recognized in unrealized gain or loss on investments.
Previous wording
Results from Operations - Three Months Ended September 30, 2024 and September 30, 2023
Current wording
Results of Operations - Three Months Ended March 31, 2025 and March 31, 2024
Previous wording
The following tables represent the Company’s results from operations for the three months ended September 30, 2024 and 2023.
Current wording
The following tables represent the Company’s results of operations for the three months ended March 31, 2025 and 2024.
Previous wording
Revenue decreased from $89,240 to $74,168 for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 primarily driven by a decline in retail sales in Michigan and New Jersey. The decline in retail sales was related to reduced discounting and promotions in Michigan leading to lower foot traffic and increased competitive pressure in New Jersey.
Current wording
Revenue decreased from $80,633 to $70,997 for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 primarily driven by a decline in retail sales in Michigan and New Jersey which was partially offset by higher sales in Maryland. The decline in Michigan was attributable to reduced foot traffic, while the decline in New Jersey reflected increased competitive pressure.
Previous wording
The decrease of $3,483, in cost of sales for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 was mainly due to a decrease in sales. Cost of sales as a percentage of revenue increased primarily due to a decline in sales for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.
Current wording
The decrease of $7,708, in cost of sales for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 was mainly due to a decrease in sales in Michigan and New Jersey, partially offset by higher sales in Maryland. Cost of sales as a percentage of revenue decreased during the period, primarily due to lower unit costs in New Jersey and greater cost absorption on higher sales volume in Maryland.
Previous wording
The loss from the revaluation of contingent consideration for the three months ended September 30, 2024 as compared to the gain from the revaluation of contingent consideration for the three months ended September 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.
Current wording
The loss from the revaluation of contingent consideration for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 decreased due to the expiration of certain contingent considerations and a reduction of TerrAscend's share price.
Previous wording
The change in provision for income taxes from $13,543 for the three months ended September 30, 2023 as compared to a provision for income taxes of $14,373 for the three months ended September 30, 2024 was primarily driven by accrued interest and penalties.
Current wording
The change in provision for income taxes from $9,671 for the three months ended March 31, 2024 as compared to a provision for income taxes of $11,447 for the three months ended March 31, 2025 was primarily driven by accrued interest and penalties.
Previous wording
The calculation of working capital provides additional information and is not defined under GAAP. The Company defines working capital as current assets less current liabilities. This measure should not be considered in isolation or as a substitute for any standardized measure under GAAP.
Current wording
The calculation of working capital provides additional information and is not defined under accounting principles generally accepted in the United States of America ("GAAP"). The Company defines working capital as current assets less current liabilities. This measure should not be considered in isolation or as a substitute for any standardized measure under GAAP.
Previous wording
The Company has $205,733 in principal amounts of loans payable at September 30, 2024. Of this amount, $8,387 are due within the next twelve months.
Current wording
The Company had $203,564 in principal amounts of loans payable at March 31, 2025. Of this amount, $7,536 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 $89,849 in lease obligations. Of this amount, $9,402 are due in the next twelve months.
Current wording
The Company entered into leases for certain premises and offices for which it owes monthly lease payments. The Company had $85,519 in lease obligations. Of this amount, $9,266 are due in the next twelve months.
Previous wording
The Company's undiscounted contingent consideration payable is $4,373 at September 30, 2024, of which, $2,546 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 was $3,288 at March 31, 2025, which 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 consideration is based upon the price protection of Common Shares issued under the terms of the applicable acquisition agreement. The contingent consideration is measured at fair value using the Black-Scholes Model and revalued at the end of each reporting period.
Previous wording
At September 30, 2024, the Company had accounts payable and accrued liabilities of $46,381 and corporate income taxes payable of $11,075.
Current wording
At March 31, 2025, the Company had accounts payable and accrued liabilities of $44,208 and corporate income taxes payable of $11,543.
Previous wording
On August 1, 2024, the Company and TerrAscend USA, Inc., as guarantors, and each of WDB Holding CA, Inc., WDB Holding PA, Inc., Moose Curve Holdings, LLC, Hempaid, LLC and, pursuant to a joinder agreement dated September 30, 2024, WDB Holding MI, Inc., including certain of each of their respective subsidiaries, as borrowers (collectively, the “Borrowers”), and FG Agency Lending LLC, as the Administrative 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 of $114,000 (the “Initial Draw”) and a delayed draw on September 30, 2024 of $26,000 (the “Delayed Draw”).
Current wording
On August 1, 2024, the Company and TerrAscend USA, Inc., as guarantors, and each of WDB Holding CA, Inc., WDB Holding PA, Inc., Moose Curve Holdings, LLC, Hempaid, LLC and, pursuant to a joinder agreement dated September 30, 2024, WDB Holding MI, Inc., including certain of each of their respective subsidiaries, as borrowers (collectively, the “Borrowers”), and FG Agency Lending LLC, as the Administrative Agent entered into a Loan Agreement (the “FG Loan”) for a four-year, $140,000 senior-secured term loan Net proceeds of the FG Loan were received in an amount equal to 95% of the $140,000.
Previous wording
The FG Loan bears interest at 12.75% per annum and matures on August 1, 2028. The FG Loan is guaranteed by the Company and TerrAscend USA, Inc. and is secured by substantially all of the assets of the Borrowers.
Current wording
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.
Previous wording
On October 11, 2022, subsidiaries of TerrAscend, among others, entered into a loan agreement with Pelorus Fund REIT, LLC ("Pelorus") for a single-draw senior secured term loan ("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 a loan agreement with Pelorus Fund REIT, LLC ("Pelorus") for a single-draw senior secured term loan ("Pelorus Term Loan") 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 September 30, 2024, 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
As of September 30, 2024, there was an outstanding principal amount of $18,576 under the promissory notes related to the Maryland acquisitions.
Current wording
As of March 31, 2025, there was an outstanding principal amount of $17,051 under the promissory notes related to the Maryland acquisitions.
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 September 30, 2024, there was an outstanding principal amount of $1,000.
Current wording
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 March 31, 2025, there was an outstanding principal amount of $1,000.
Previous wording
On August 20, 2024, the Board approved a share repurchase program to repurchase up to $10,000 of the Company’s common shares (“Shares”). The share repurchase program authorizes the Company to repurchase up to 10,000,000 common shares of the Company at any time, or from time to time, from August 22, 2024 until August 21, 2025. The share repurchase program authorizes the Company to repurchase up to 65,361 Shares daily, which represents 25% of the Company’s average daily trading volume on the Toronto Stock Exchange of 261,445 Shares. Any repurchases under the program may be made by means of open market transactions, negotiated block transactions, or otherwise, including pursuant to a repurchase plan administered in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. The size and timing of any repurchases will depend on price, market and business conditions, and other factors.
Current wording
On August 20, 2024, the Board approved a share repurchase program to repurchase up to $10,000 of Common Shares. The share repurchase program authorizes the Company to repurchase up to 10,000,000 Common Shares of the Company at any time, or from time to time, from August 22, 2024 until August 21, 2025. The share repurchase program authorizes the Company to repurchase up to 65,361 Common Shares daily, which represents 25% of the Company’s average daily trading volume on the TSX of 261,445 Common Shares. Any repurchases under the program may be made by means of open market transactions, negotiated block transactions, or otherwise, including pursuant to a repurchase plan administered in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. The size and timing of any repurchases will depend on price, market and business conditions, and other factors.
Previous wording
During the third quarter of 2024, the Company repurchased 107,400 common shares under the share repurchase program for total consideration of approximately $133. As of September 30, 2024, the Company had a total of 9,892,600 shares remaining that can be authorized for repurchase.
Current wording
During the first quarter of 2025, the Company repurchased 507,500 common shares under the share repurchase program for total consideration of approximately $231. As of March 31, 2025, the Company had a total of 9,255,600 Common Shares remaining that can be authorized for repurchase.
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 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.
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 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 and Adjusted EBITDA as net loss, adjusted to exclude provision for income taxes, finance expenses, depreciation and amortization, share-based compensation, unrealized and realized loss on investments, loss from revaluation of contingent consideration, unrealized and realized foreign exchange loss, gain on derecognition of right of use assets, (gain) loss on fair value of derivative liabilities and purchase option derivative assets, impairment of property and equipment and right of use assets, 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 to EBITDA from continuing operations and Adjusted EBITDA from continuing operations for the three and nine months ended September 30, 2024 and 2023:
Current wording
The Company believes Adjusted EBITDA 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 and Adjusted EBITDA for the three months ended March 31, 2025 and 2024:
Previous wording
EBITDA from continuing operations is a non-GAAP measure and is calculated from net (loss) income.
Current wording
EBITDA is a non-GAAP measure and is calculated from net loss.
Previous wording
Represents unrealized and realized gain on fair value changes on strategic investments.
Current wording
Represents unrealized and realized loss on fair value changes investments.
Previous wording
Represents the (gain) loss taken as a result on lease termination and derecognition of right of use assets.
Current wording
Represents the loss taken as a result on derecognition of right of use assets.
Previous 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.
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, consulting, legal, and accounting fees. These fees are not indicative of the Company's ongoing costs.
Previous wording
The table below reconciles net cash provided by operating activities from continuing operations to free cash flow for the nine months ended September 30, 2024 and 2023:
Current wording
The table below reconciles net cash provided by operating activities to free cash flow for the three months ended March 31, 2025 and 2024:
Previous wording
The condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. The Company bases its estimates on historical experience and assumptions on an ongoing basis. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and actual results, the Company's future financial statements will be affected.
Current wording
The Consolidated Financial Statements have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. The Company bases its estimates on historical experience and assumptions on an ongoing basis. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and actual results, the Company's future financial statements will be affected.
Previous wording
The Company will remain an emerging growth company until the earlier to occur of: (i) December 31, 2027 (a) in which the Company has total annual gross revenue of $1,235,000 or more, or (b) in which the Company is deemed to be a large accelerated filer, which means the market value of the Company's Common Stock that is held by non-affiliates exceeds $700,000 as of the last business day of the Company’s most recent second fiscal quarter; and (ii) the date on which the Company has issued more than $1,000,000 in non-convertible debt during the prior three-year period.
Current wording
The Company will remain an emerging growth company until the earlier to occur of: (i) December 31, 2027 (a) in which the Company has total annual gross revenue of $1,235,000 or more, or (b) in which the Company is deemed to be a large accelerated filer, which means the market value of the Company's Common Shares that are held by non-affiliates exceeds $700,000 as of the last business day of the Company’s most recent second fiscal quarter; and (ii) the date on which the Company has issued more than $1,000,000 in non-convertible debt during the prior three-year period.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
(Gain) loss on fair value of derivative liabilities and purchase option derivative assets
Current report — wording carried from elsewhere
Unrealized and realized loss on investments
Current report — wording carried from elsewhere
As of March 31, 2025, there was an outstanding principal amount of $45,478 under the Pelorus Term Loan.
Current report — wording carried from elsewhere
In connection with the listing of the Common Shares on the TSX, the Company reorganized its ownership structure to segregate the Company’s Canadian retail operations from TerrAscend's cultivation and manufacturing operations in the United States. As a result, 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,
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Impairment of property and equipment and right of use assets
Previous report — wording carried elsewhere
The following tables represent the Company’s results from operations for the nine months ended September 30, 2024 and 2023.
Previous report — wording carried elsewhere
Impairment of property and equipment and right of use assets
Previous report — wording carried elsewhere
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.