TABLE OF CONTENTS | |||||||||||
Management’s Responsibility for the Financial Statements | |||||||||||
Independent Auditors' Reports | 2 | – | 8 | ||||||||
Consolidated Statements of Financial Position | 9 | ||||||||||
Consolidated Statements of Operations and Comprehensive Loss | 10 | ||||||||||
Consolidated Statements of Changes in Equity | 11 | ||||||||||
Consolidated Statements of Cash Flows | 12 | ||||||||||
Notes to the Consolidated Financial Statements | 12 | – | 47 | ||||||||
(signed) ‘Beena Goldenberg’ | (signed) ‘Derrick West’ | ||||
Chief Executive Officer | Chief Financial Officer | ||||
Moncton, New Brunswick | Moncton, New Brunswick |
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of
Organigram Holdings Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of Organigram Holdings Inc. and subsidiaries (the "Company") as of August 31, 2020, the related consolidated statements of loss and comprehensive loss, consolidated statements of changes in equity, and consolidated statements of cash flows, for the year ended August 31, 2020, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2020, its financial performance and its cash flows for the year ended August 31, 2020, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte LLP
Chartered Professional Accountants
Moncton, Canada
November 29, 2020
We began serving as the Company's auditor in 2015. In 2021 we became the predecessor auditor.
KPMG LLP
100 New Park Place, Suite 1400
Vaughan, ON L4K 0J3
Tel 905-265 5900
Fax 905-265 6390
www.kpmg.ca
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Organigram Holdings Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statement of financial position of Organigram Holdings Inc. and subsidiaries (the Company) as of August 31, 2021, the related consolidated statements of operations and comprehensive loss, changes in equity, and cash flows for the year then ended, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2021, and the results of its operations and its cash flows for the year then ended, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of August 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated November 22, 2021 expressed an adverse opinion on the effectiveness of the Company's internal control over financial reporting.
Other Matter
Another auditor audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements of the Company, which comprise the consolidated statement of financial position as of August 31, 2020, the consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the year then ended, and related notes. In their auditors' report dated November 29, 2020, they expressed an unmodified audit opinion on those consolidated financial statements.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
KPMG LLP, an Ontario limited liability partnership and member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. KPMG Canada provides services to KPMG LLP.
Organigram Holdings Inc.
November 22, 2021
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Measurement of fair value of biological assets
As discussed in notes 3 iii) and xx), 1, and 7 to the consolidated financial statements, the Company measures biological assets, which consist of cannabis plants, at fair value less costs to sell up to the point of harvest, which then becomes the basis for the cost of finished goods inventories after harvest. As of August 31, 2021, the carrying value of the Company's biological assets was $12,122 thousand. The fair value less costs to sell of biological assets is determined using a model which utilizes an estimate of the expected harvest yield in grams for plants currently being cultivated, multiplied by the expected selling price and then adjusted for any additional costs to be incurred, such as post-harvest costs.
We identified the assessment of the estimate of the fair value less costs to sell of biological assets as a critical audit matter as a high degree of auditor judgment was required to evaluate the significant assumptions. The significant assumptions used to determine the fair value less costs to sell of biological assets are average selling price per gram and yield per plant.
Organigram Holdings Inc.
November 22, 2021
The following are the primary procedures we performed to address this critical audit matter. We tested the average selling price per gram by comparing to actual sales prices per gram as set out in sales invoices for transactions in the fourth quarter and subsequent to year end. We tested the average yield per plant by observing the number of grams harvested of certain plants at a selection of post-harvest weigh ins and comparing to the actual harvest records. We performed sensitivity analyses over the Company's significant assumptions used to determine the fair value less costs to sell of biological assets to assess the impact of changes in these assumptions on the Company's determination of fair value less costs to sell.
Chartered Professional Accountants, Licensed Public Accountants
We have served as the Company's auditor since 2020.
Vaughan, Canada
November 22, 2021
KPMG LLP
100 New Park Place, Suite 1400
Vaughan, ON L4K 0J3
Tel 905-265 5900
Fax 905-265 6390
www.kpmg.ca
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Organigram Holdings Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited Organigram Holdings Inc.'s and subsidiaries' (the Company) internal control over financial reporting as of August 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, because of the effect of the material weaknesses, described below, on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of August 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statement of financial position of the Company as of August 31, 2021, the related consolidated statements of operations and comprehensive loss, changes in equity, and cash flows for the year then ended, and the related notes (collectively, the consolidated financial statements), and our report dated November 22, 2021, expressed an unqualified opinion on those consolidated financial statements.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. Material weaknesses related to the following have been identified and included in management's assessment:
- An ineffective control environment resulting from an insufficient number of trained financial reporting and accounting, information technology (IT) and operational personnel with the appropriate skills and knowledge and with assigned responsibility and accountability related to the design, implementation and operation of internal control over financial reporting.
- The insufficient number of personnel described above contributed to an ineffective risk assessment process necessary to identify all relevant risks of material misstatement and to evaluate the implications of relevant risks on its internal control over financial reporting.
KPMG LLP, an Ontario limited liability partnership and member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. KPMG Canada provides services to KPMG LLP.
Organigram Holdings Inc.
November 22, 2021
- An ineffective information and communication process resulting from (i) insufficient communication of internal control information, including objectives and responsibilities, such as delegation of authority; and (ii) ineffective general IT controls, ineffective controls related to complex spreadsheets, and ineffective controls over information from service organizations, resulting in insufficient controls to ensure the relevance, timeliness and quality of information used in control activities.
- As a consequence of the above, the Company had ineffective control activities related to the design, implementation and operation of process-level and financial statement close controls which had a pervasive impact on the Company's internal control over financial reporting.
The material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements, and this report does not affect our report on those consolidated financial statements.
The Company acquired Edibles and Infusions Corporation ("EIC") during 2021, and management excluded from its assessment of the effectiveness of the Company's internal control over financial reporting as of August 31, 2021, EIC's internal control over financial reporting which constitutes, excluding goodwill and intangible assets, 1% of current assets, 3% of total assets, 6% of current liabilities and 4% of total liabilities, as well as 0% of net revenue and 1% of net loss included in the consolidated financial statements of the Company as of and for the year ended August 31, 2021. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of EIC.
Basis for Opinion
The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying "Management's Evaluation of Internal Control over Financial Reporting" found in Management's Discussion and Analysis. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Organigram Holdings Inc.
November 22, 2021
Definition and Limitations of Internal Control Over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Chartered Professional Accountants, Licensed Public Accountants
Vaughan, Canada
November 22, 2021
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash | $ | 55,365 | $ | 24,600 | |||||||
Short-term investments (Note 4) | 128,190 | 50,128 | |||||||||
Accounts receivable (Note 5) | 21,035 | 14,747 | |||||||||
Loan receivable (Note 6) | 250 | 2,229 | |||||||||
Biological assets (Note 7) | 12,122 | 5,394 | |||||||||
Inventories (Note 8) | 36,696 | 66,365 | |||||||||
Prepaid expenses and deposits | 6,957 | 6,741 | |||||||||
260,615 | 170,204 | ||||||||||
Restricted funds (Note 12 and Note 14(iii)) | 31,109 | 8,032 | |||||||||
Property, plant and equipment (Note 9) | 235,939 | 247,420 | |||||||||
Intangible assets and goodwill (Note 10) | 17,046 | 1,772 | |||||||||
Deferred charges and deposits (Note 9) | 3,195 | 698 | |||||||||
Investments in associates (Note 16) | 5,028 | 7,001 | |||||||||
Net investment in sublease (Note 5 and Note 15(ii)) | 1,085 | — | |||||||||
$ | 554,017 | $ | 435,127 | ||||||||
LIABILITIES | |||||||||||
Current liabilities | |||||||||||
Accounts payable and accrued liabilities | $ | 23,436 | $ | 17,486 | |||||||
Provisions (Note 11) | 2,750 | — | |||||||||
Current portion of long-term debt (Note 12) | 80 | 11,595 | |||||||||
26,266 | 29,081 | ||||||||||
Long-term debt (Note 12) | 230 | 103,671 | |||||||||
Derivative liabilities (Note 13) | 37,527 | — | |||||||||
Other long-term liabilities (Note 15) | 10,189 | 2,848 | |||||||||
74,212 | 135,600 | ||||||||||
SHAREHOLDERS' EQUITY | |||||||||||
Share capital (Note 14) | 730,803 | 420,673 | |||||||||
Equity reserves (Note 14) | 24,724 | 23,744 | |||||||||
Accumulated other comprehensive (loss) income | (78) | 50 | |||||||||
Accumulated deficit | (275,644) | (144,940) | |||||||||
479,805 | 299,527 | ||||||||||
$ | 554,017 | $ | 435,127 |
YEAR ENDED | |||||||||||||||||||||||
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||||||||||||||
REVENUE | |||||||||||||||||||||||
Gross revenue (Note 20) | $ | 109,859 | $ | 103,387 | |||||||||||||||||||
Excise taxes | (30,696) | (16,592) | |||||||||||||||||||||
Net revenue | 79,163 | 86,795 | |||||||||||||||||||||
Cost of sales (Note 21) | 103,567 | 105,004 | |||||||||||||||||||||
Gross margin before fair value adjustments | (24,404) | (18,209) | |||||||||||||||||||||
Fair value adjustments to biological assets, inventories sold, and other charges (Note 7) | (3,995) | (38,281) | |||||||||||||||||||||
Gross margin | (28,399) | (56,490) | |||||||||||||||||||||
OPERATING EXPENSES | |||||||||||||||||||||||
General and administrative (Note 23) | 33,565 | 27,996 | |||||||||||||||||||||
Sales and marketing | 15,807 | 16,528 | |||||||||||||||||||||
Share-based compensation (Note 14(iv)) | 3,215 | 4,725 | |||||||||||||||||||||
Impairment of intangible assets (Note 10) | 1,701 | — | |||||||||||||||||||||
Impairment of property, plant and equipment (Note 9) | 9,133 | 39,771 | |||||||||||||||||||||
Total operating expenses | 63,421 | 89,020 | |||||||||||||||||||||
LOSS FROM OPERATIONS | (91,820) | (145,510) | |||||||||||||||||||||
Financing costs | 2,960 | 6,008 | |||||||||||||||||||||
Investment income | (854) | (308) | |||||||||||||||||||||
Government subsidies (Note 26) | (8,147) | (7,883) | |||||||||||||||||||||
Share of loss from investments in associates (Note 16) | 1,118 | 1,187 | |||||||||||||||||||||
Impairment of loan receivable and investments in associates (Note 6 and Note 16) | 5,245 | 3,000 | |||||||||||||||||||||
Loss on disposal of property, plant and equipment | 2,426 | — | |||||||||||||||||||||
Change in fair value of contingent consideration (Note 15(i)) | 3,558 | (886) | |||||||||||||||||||||
Share issue costs allocated to derivative liabilities (Note 13) | 803 | — | |||||||||||||||||||||
Change in fair value of derivative liabilities (Note 13) | 29,025 | — | |||||||||||||||||||||
Legal provision (Note 22) | 2,750 | — | |||||||||||||||||||||
Loss before tax | (130,704) | (146,628) | |||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Deferred, net (Note 24) | — | (10,471) | |||||||||||||||||||||
NET LOSS | $ | (130,704) | $ | (136,157) | |||||||||||||||||||
Other comprehensive (loss) income | |||||||||||||||||||||||
Foreign currency translation (loss) gain, net of tax | (128) | 93 | |||||||||||||||||||||
COMPREHENSIVE LOSS | $ | (130,832) | $ | (136,064) | |||||||||||||||||||
Net loss per common share, basic (Note 14 (v)) | $ | (0.510) | $ | (0.789) | |||||||||||||||||||
Net loss per common share, diluted (Note 14 (v)) | $ | (0.510) | $ | (0.789) |
NUMBER OF SHARES | SHARE CAPITAL | EQUITY RESERVES | ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | ACCUMULATED DEFICIT | SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||||||
Balance - September 1, 2019 | 156,196,347 | $ | 318,125 | $ | 17,707 | $ | (43) | $ | (8,783) | $ | 327,006 | ||||||||||||||||||||||||
At-the-market equity financing, net of issue costs of 3,754 (Note 14 (iii)) | 37,281,412 | 99,997 | — | — | — | 99,997 | |||||||||||||||||||||||||||||
Share-based compensation (Note 14 (iv)) | — | — | 7,519 | — | — | 7,519 | |||||||||||||||||||||||||||||
Exercise of stock options (Note 14 (iii)) | 879,240 | 1,786 | (717) | — | — | 1,069 | |||||||||||||||||||||||||||||
Exercise of restricted share units (Note 14 (iii)) | 154,062 | 765 | (765) | — | — | — | |||||||||||||||||||||||||||||
Foreign currency translation gain, net of tax | — | — | — | 93 | — | 93 | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | (136,157) | (136,157) | |||||||||||||||||||||||||||||
Balance - August 31, 2020 | 194,511,061 | $ | 420,673 | $ | 23,744 | $ | 50 | $ | (144,940) | $ | 299,527 | ||||||||||||||||||||||||
Balance - September 1, 2020 | 194,511,061 | $ | 420,673 | $ | 23,744 | $ | 50 | $ | (144,940) | $ | 299,527 | ||||||||||||||||||||||||
Unit financing, net of issue costs of $3,502(Note 14 (iii)) | 37,375,000 | 52,747 | — | — | — | 52,747 | |||||||||||||||||||||||||||||
Private placement, net of issue costs of $1,174 (Note 14 (iii)) | 58,336,392 | 217,297 | — | — | — | 217,297 | |||||||||||||||||||||||||||||
Shares issued related to business combination, net of issue costs of $65 (Note 14 (iii) and Note 28) | 5,045,873 | 21,935 | — | — | — | 21,935 | |||||||||||||||||||||||||||||
Share-based compensation (Note 14 (iv)) | — | — | 3,612 | — | — | 3,612 | |||||||||||||||||||||||||||||
Exercise of stock options (Note 14 (iii)) | 1,691,498 | 6,268 | (2,241) | — | — | 4,027 | |||||||||||||||||||||||||||||
Exercise of restricted share units (Note 14 (iii)) | 80,491 | 382 | (382) | — | — | — | |||||||||||||||||||||||||||||
Exercise of performance share units (Note 14 (iii)) | 1,858 | 9 | (9) | — | — | — | |||||||||||||||||||||||||||||
Exercise of warrants (Note 14 (iii)) | 1,743,850 | 11,492 | — | — | — | 11,492 | |||||||||||||||||||||||||||||
Foreign currency translation loss, net of tax | — | — | — | (128) | — | (128) | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | (130,704) | (130,704) | |||||||||||||||||||||||||||||
Balance - August 31, 2021 | 298,786,023 | $ | 730,803 | $ | 24,724 | $ | (78) | $ | (275,644) | $ | 479,805 |
YEAR ENDED | |||||||||||||||||||||||
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||||||||||||||
CASH PROVIDED (USED) | |||||||||||||||||||||||
OPERATING ACTIVITIES | |||||||||||||||||||||||
Net loss | $ | (130,704) | $ | (136,157) | |||||||||||||||||||
Items not affecting operating cash: | |||||||||||||||||||||||
Share-based compensation (Note 14 (iv)) | 3,896 | 7,796 | |||||||||||||||||||||
Depreciation and amortization (Note 9 and Note 10) | 31,033 | 17,958 | |||||||||||||||||||||
Loss on disposal of property, plant and equipment | 2,426 | 778 | |||||||||||||||||||||
Impairment losses (Note 6, Note 9, Note 10 and Note 16) | 6,946 | 42,771 | |||||||||||||||||||||
Fair value adjustment to biological assets (Note 7) | (5,742) | (2,853) | |||||||||||||||||||||
Financing costs | 2,960 | 6,008 | |||||||||||||||||||||
Investment income | (854) | (308) | |||||||||||||||||||||
Share of loss from investments in associates (Note 16) | 1,118 | 1,201 | |||||||||||||||||||||
Change in fair value of contingent consideration (Note 15(i)) | 3,558 | (886) | |||||||||||||||||||||
Change in legal provision | 2,750 | — | |||||||||||||||||||||
Change in fair value of derivative liabilities (Note 13) | 29,025 | — | |||||||||||||||||||||
Share issue costs allocated to derivative warrants (Note 13) | 803 | — | |||||||||||||||||||||
Deferred tax expense | — | (10,471) | |||||||||||||||||||||
Changes in non-cash working capital: | |||||||||||||||||||||||
Net change in accounts receivable | (6,007) | 1,794 | |||||||||||||||||||||
Net change in biological assets | (986) | 18,111 | |||||||||||||||||||||
Net change in inventories | 29,669 | 27,530 | |||||||||||||||||||||
Net change in accounts payable and accrued liabilities | 2,062 | (27,995) | |||||||||||||||||||||
Net change in prepaid expenses and deferred charges | (542) | 9,598 | |||||||||||||||||||||
Net cash used in operating activities | (28,589) | (45,125) | |||||||||||||||||||||
FINANCING ACTIVITIES | |||||||||||||||||||||||
Proceeds from equity financing, net of issue costs (Note 14(iii)) | — | 99,997 | |||||||||||||||||||||
Proceeds from unit financing, net of issue costs (Note 13 and Note 14(iii)) | 64,839 | — | |||||||||||||||||||||
Private placement, net of issue costs (Note 13 and Note 14(iii)) | 220,037 | — | |||||||||||||||||||||
Payment of lease liabilities, net of sublease receipts (Note 15(ii)) | (1,344) | (897) | |||||||||||||||||||||
Payment of long-term debt (Note 12) | (115,059) | (55) | |||||||||||||||||||||
Proceeds from long-term debt, net of issue costs of $nil (2020 - $705) (Note 12) | — | 64,295 | |||||||||||||||||||||
Stock options and warrants exercised (Note 14) | 8,387 | 1,069 | |||||||||||||||||||||
Interest and fees paid on long-term debt | (2,397) | (4,043) | |||||||||||||||||||||
Net cash provided by financing activities | 174,463 | 160,366 | |||||||||||||||||||||
INVESTING ACTIVITIES | |||||||||||||||||||||||
Purchase of short-term investments | (120,020) | (50,000) | |||||||||||||||||||||
Proceeds from short-term investments | 50,072 | 135 | |||||||||||||||||||||
Investment income | 782 | 393 | |||||||||||||||||||||
Investments in associates (Note 16) | (2,539) | — | |||||||||||||||||||||
Restricted funds | (31,109) | (8,000) | |||||||||||||||||||||
Loan advance | — | (2,071) | |||||||||||||||||||||
Proceeds on sale of property, plant and equipment | 34 | — | |||||||||||||||||||||
Purchase of property, plant and equipment (Note 9) | (11,791) | (77,223) | |||||||||||||||||||||
Purchase of intangible assets (Note 10) | (538) | (1,430) | |||||||||||||||||||||
Net cash used in investing activities | (115,109) | (138,196) | |||||||||||||||||||||
INCREASE (DECREASE) IN CASH | $ | 30,765 | $ | (22,955) | |||||||||||||||||||
CASH POSITION | |||||||||||||||||||||||
Beginning of period | $ | 24,600 | $ | 47,555 | |||||||||||||||||||
End of period | $ | 55,365 | $ | 24,600 |
Buildings | 25 years | |||||||
Growing and processing equipment | 10 years | |||||||
Computer equipment | 5 years | |||||||
Vehicles | 5 years | |||||||
Furniture and fixtures | 10 years | |||||||
Leasehold improvements | 5 years | |||||||
Right-of-use assets | term of lease |
DESCRIPTION | INTEREST % | AUGUST 31, 2021 | AUGUST 31, 2020 | |||||||||||
GIC - maturing September 16, 2020 | 0.95% | $ | — | $ | 10,000 | |||||||||
GIC - maturing September 24, 2020 | 0.95% | — | 10,000 | |||||||||||
GIC - maturing December 15, 2020 | 1.16% | — | 10,000 | |||||||||||
GIC - maturing December 23, 2020 | 1.16% | — | 10,000 | |||||||||||
GIC - maturing June 17, 2021 | 0.93% | — | 10,000 | |||||||||||
GIC - maturing November 2, 2021 | 0.50% | 60,000 | — | |||||||||||
GIC - maturing May 4, 2022 | 0.70% | 60,138 | — | |||||||||||
GIC - maturing May 27, 2022 | 1.50% | 8,032 | — | |||||||||||
Bond - Canada Revenue Agency | 20 | — | ||||||||||||
Equity securities in VIVO Cannabis Inc. | — | 128 | ||||||||||||
$ | 128,190 | $ | 50,128 |
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||
Gross trade receivables | $ | 20,915 | $ | 11,995 | |||||||
Less: reserves for product returns and price adjustments | (710) | (899) | |||||||||
Trade receivables | 20,205 | 11,096 | |||||||||
Harmonized sales taxes receivable | 195 | 728 | |||||||||
Sublease rental receivable (Note 15) | 288 | — | |||||||||
Accrued investment income | 99 | — | |||||||||
Government programs | 187 | 2,936 | |||||||||
Other accounts receivable | 61 | — | |||||||||
Less: Expected credit losses | — | (13) | |||||||||
$ | 21,035 | $ | 14,747 |
AMOUNT | |||||||||||||||||
Carrying amount, August 31, 2019 | $ | 20,652 | |||||||||||||||
Add net production costs | 41,052 | ||||||||||||||||
Net change in fair value less costs to sell due to biological transformation | (2,853) | ||||||||||||||||
Deduct net abnormal plant destruction costs | (5,048) | ||||||||||||||||
Transferred to inventory upon harvest | (48,409) | ||||||||||||||||
Carrying amount, August 31, 2020 | $ | 5,394 | |||||||||||||||
(Deduct) Add net production costs | 34,218 | ||||||||||||||||
Net change in fair value less costs to sell due to biological transformation | 5,742 | ||||||||||||||||
Transferred to inventory upon harvest | (33,232) | ||||||||||||||||
Carrying amount, August 31, 2021 | $ | 12,122 |
SIGNIFICANT INPUTS & | WEIGHTED AVERAGE INPUT | EFFECT ON FAIR VALUE | |||||||||||||||||||||||||||
ASSUMPTIONS | AUGUST 31, 2021 | AUGUST 31, 2020 | SENSITIVITY | AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||||||||||||||||
Average net selling price per gram | $ | 2.54 | $ | 3.36 | Increase or decrease by $1.00 per gram | $ | 4,764 | $ | 1,602 | ||||||||||||||||||||
Average yield per plant | 129 | grams | 101 | grams | Increase or decrease by 10 grams | $ | 937 | $ | 532 |
YEAR ENDED | |||||||||||||||||||||||
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||||||||||||||
Realized fair value amounts included in inventory sold | $ | (19,489) | $ | (39,455) | |||||||||||||||||||
Increase in fair value on growth of biological assets | 31,726 | 73,975 | |||||||||||||||||||||
Adjustment to net realizable value of inventory on hand at year end | (16,232) | (72,801) | |||||||||||||||||||||
Fair value adjustments to biological assets, inventories sold, and other charges | $ | (3,995) | $ | (38,281) |
AUGUST 31, 2021 | |||||||||||||||||
CAPITALIZED COST | FAIR VALUE ADJUSTMENT | CARRYING VALUE | |||||||||||||||
Plants in drying stage | $ | 1,387 | $ | 1,303 | $ | 2,690 | |||||||||||
Dry cannabis | |||||||||||||||||
Available for packaging | 9,736 | 5,303 | 15,039 | ||||||||||||||
Packaged inventory | 3,922 | 1,749 | 5,671 | ||||||||||||||
Flower and trim available for extraction | 456 | 329 | 785 | ||||||||||||||
Concentrated extract | 3,009 | 733 | 3,742 | ||||||||||||||
Formulated extracts | |||||||||||||||||
Available for packaging | 462 | 161 | 623 | ||||||||||||||
Packaged inventory | 2,028 | 95 | 2,123 | ||||||||||||||
Packaging and supplies | 6,023 | — | 6,023 | ||||||||||||||
$ | 27,023 | $ | 9,673 | $ | 36,696 |
AUGUST 31, 2020 | |||||||||||||||||
CAPITALIZED COST | FAIR VALUE ADJUSTMENT | CARRYING VALUE | |||||||||||||||
Plants in drying stage | $ | 2,036 | $ | 1,841 | $ | 3,877 | |||||||||||
Dry cannabis | |||||||||||||||||
Available for packaging | 13,124 | 7,808 | 20,932 | ||||||||||||||
Packaged inventory | 3,707 | 1,956 | 5,663 | ||||||||||||||
Flower and trim available for extraction | 849 | 1,062 | 1,911 | ||||||||||||||
Concentrated extract | 13,252 | 6,130 | 19,382 | ||||||||||||||
Formulated extracts | |||||||||||||||||
Available for packaging | 1,097 | 384 | 1,481 | ||||||||||||||
Packaged inventory | 1,045 | 226 | 1,271 | ||||||||||||||
Packaging and supplies | 11,848 | — | 11,848 | ||||||||||||||
$ | 46,958 | $ | 19,407 | $ | 66,365 |
LAND | BUILDINGS | CONSTRUCTION IN PROCESS | GROWING & PROCESSING EQUIPMENT | OTHER | RIGHT-OF-USE ASSETS | TOTAL | |||||||||||||||||||||||||||||||||||
Cost | |||||||||||||||||||||||||||||||||||||||||
Balance, August 31, 2019 | $ | 2,211 | $ | 70,774 | $ | 65,515 | $ | 87,931 | $ | 6,697 | $ | — | $ | 233,128 | |||||||||||||||||||||||||||
Transition to IFRS 16 (Note a) | — | — | — | — | — | 2,244 | 2,244 | ||||||||||||||||||||||||||||||||||
Additions (Note c) | 1,864 | 22,316 | 46,847 | 7,597 | 1,335 | 2,220 | 82,179 | ||||||||||||||||||||||||||||||||||
Construction completed | — | 71,663 | (110,234) | 37,851 | 720 | — | — | ||||||||||||||||||||||||||||||||||
Disposals | — | (517) | — | (436) | (75) | — | (1,028) | ||||||||||||||||||||||||||||||||||
Impairment (Note b) | — | (37,214) | — | 48 | — | — | (37,166) | ||||||||||||||||||||||||||||||||||
Balance, August 31, 2020 | $ | 4,075 | $ | 127,022 | $ | 2,128 | $ | 132,991 | $ | 8,677 | $ | 4,464 | $ | 279,357 | |||||||||||||||||||||||||||
Accumulated depreciation | |||||||||||||||||||||||||||||||||||||||||
Balance, August 31, 2019 | $ | — | $ | (4,237) | $ | — | $ | (8,618) | $ | (1,803) | $ | — | $ | (14,658) | |||||||||||||||||||||||||||
Depreciation | — | (4,074) | — | (11,568) | (1,362) | (557) | (17,561) | ||||||||||||||||||||||||||||||||||
Disposals | — | 108 | — | 145 | 29 | — | 282 | ||||||||||||||||||||||||||||||||||
Balance, August 31, 2020 | $ | — | $ | (8,203) | $ | — | $ | (20,041) | $ | (3,136) | $ | (557) | $ | (31,937) | |||||||||||||||||||||||||||
Cost | |||||||||||||||||||||||||||||||||||||||||
Balance, August 31, 2020 | $ | 4,075 | $ | 127,022 | $ | 2,128 | $ | 132,991 | $ | 8,677 | $ | 4,464 | $ | 279,357 | |||||||||||||||||||||||||||
Acquisitions through business combination (Note 28) | — | 5,786 | 2,859 | 720 | 721 | 1,742 | 11,828 | ||||||||||||||||||||||||||||||||||
Additions (Note c) | — | 2,928 | 1,762 | 4,655 | 270 | — | 9,615 | ||||||||||||||||||||||||||||||||||
Transfers | — | — | — | — | 667 | (889) | (222) | ||||||||||||||||||||||||||||||||||
Construction completed | — | 27 | (4,657) | 4,630 | — | — | — | ||||||||||||||||||||||||||||||||||
Disposals | — | — | — | (3,586) | (12) | — | (3,598) | ||||||||||||||||||||||||||||||||||
Balance, August 31, 2021 | $ | 4,075 | $ | 135,763 | $ | 2,092 | $ | 139,410 | $ | 10,323 | $ | 5,317 | $ | 296,980 | |||||||||||||||||||||||||||
Accumulated depreciation | |||||||||||||||||||||||||||||||||||||||||
Balance, August 31, 2020 | $ | — | $ | (8,203) | $ | — | $ | (20,041) | $ | (3,136) | $ | (557) | $ | (31,937) | |||||||||||||||||||||||||||
Depreciation | — | (5,456) | — | (22,735) | (1,451) | (822) | (30,464) | ||||||||||||||||||||||||||||||||||
Transfers | — | — | — | — | — | 222 | 222 | ||||||||||||||||||||||||||||||||||
Disposals | — | — | — | 1,129 | 9 | — | 1,138 | ||||||||||||||||||||||||||||||||||
Balance, August 31, 2021 | $ | — | $ | (13,659) | $ | — | $ | (41,647) | $ | (4,578) | $ | (1,157) | $ | (61,041) | |||||||||||||||||||||||||||
Net book value | |||||||||||||||||||||||||||||||||||||||||
August 31, 2020 | $ | 4,075 | $ | 118,819 | $ | 2,128 | $ | 112,950 | $ | 5,541 | $ | 3,907 | $ | 247,420 | |||||||||||||||||||||||||||
August 31, 2021 | $ | 4,075 | $ | 122,104 | $ | 2,092 | $ | 97,763 | $ | 5,745 | $ | 4,160 | $ | 235,939 |
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||
Additions | $ | 21,443 | $ | 82,179 | |||||||
Additions related to business combination (Note 28) | (11,828) | — | |||||||||
Additions related to right-of-use lease assets | — | (2,220) | |||||||||
Net change in deferred charges and deposits related to purchases of property, plant and equipment | 2,668 | — | |||||||||
Net change in accounts payable and accrued liabilities related to purchases of property, plant and equipment | (492) | (2,736) | |||||||||
Purchase of property, plant and equipment | $ | 11,791 | $ | 77,223 |
GOODWILL | SUPPLY AGREEMENT | LICENSE AGREEMENTS | COMPUTER SOFTWARE | NON-COMPETE AGREEMENT | TOTAL | ||||||||||||||||||||||||||||||
Cost | |||||||||||||||||||||||||||||||||||
Balance, August 31, 2019 | $ | — | $ | 1,530 | $ | — | $ | 841 | $ | — | $ | 2,371 | |||||||||||||||||||||||
Additions | — | — | 198 | 1,232 | — | 1,430 | |||||||||||||||||||||||||||||
Impairment | — | (1,303) | — | — | — | (1,303) | |||||||||||||||||||||||||||||
Disposal | — | — | — | (32) | — | (32) | |||||||||||||||||||||||||||||
Balance, August 31, 2020 | $ | — | $ | 227 | $ | 198 | $ | 2,041 | $ | — | $ | 2,466 | |||||||||||||||||||||||
Accumulated amortization | |||||||||||||||||||||||||||||||||||
Balance, August 31, 2019 | $ | — | $ | (32) | $ | — | $ | (265) | $ | — | $ | (297) | |||||||||||||||||||||||
Amortization | — | (195) | — | (202) | — | (397) | |||||||||||||||||||||||||||||
Balance, August 31, 2020 | $ | — | $ | (227) | $ | — | $ | (467) | $ | — | $ | (694) | |||||||||||||||||||||||
Cost | |||||||||||||||||||||||||||||||||||
Balance, August 31, 2020 | $ | — | $ | 227 | $ | 198 | $ | 2,041 | $ | — | $ | 2,466 | |||||||||||||||||||||||
Acquisitions through business combination (Note 28) | 14,321 | — | 2,100 | — | 585 | 17,006 | |||||||||||||||||||||||||||||
Additions | — | — | — | 538 | — | 538 | |||||||||||||||||||||||||||||
Impairment | — | — | — | (1,701) | — | (1,701) | |||||||||||||||||||||||||||||
Disposal | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Balance, August 31, 2021 | $ | 14,321 | $ | 227 | $ | 2,298 | $ | 878 | $ | 585 | $ | 18,309 | |||||||||||||||||||||||
Accumulated amortization | |||||||||||||||||||||||||||||||||||
Balance, August 31, 2020 | $ | — | $ | (227) | $ | — | $ | (467) | $ | — | $ | (694) | |||||||||||||||||||||||
Amortization | — | — | (373) | (147) | (49) | (569) | |||||||||||||||||||||||||||||
Balance, August 31, 2021 | $ | — | $ | (227) | $ | (373) | $ | (614) | $ | (49) | $ | (1,263) | |||||||||||||||||||||||
Net book value | |||||||||||||||||||||||||||||||||||
August 31, 2020 | $ | — | $ | — | $ | 198 | $ | 1,574 | $ | — | $ | 1,772 | |||||||||||||||||||||||
August 31, 2021 | $ | 14,321 | $ | — | $ | 1,925 | $ | 264 | $ | 536 | $ | 17,046 |
LEGAL PROVISION | |||||
Balance - August 31, 2020 | $ | — | |||
Additions | 2,750 | ||||
2,750 | |||||
Less: current portion | (2,750) | ||||
Balance - August 31, 2021 | $ | — |
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||
BMO senior secured term loan ("Term Loan") maturing May 31, 2022 | $ | — | $ | 115,000 | |||||||
Atlantic Canada Opportunities Agency ("ACOA") Business Development Program loan maturing September 1, 2024 with a 7 year amortization, bearing interest at an interest rate of 0% | 272 | 311 | |||||||||
Vehicle loans - five year term maturing June 17, 2024 | 58 | 78 | |||||||||
Deferred financing costs, net of loan modification loss on BMO Term Loan | (20) | (123) | |||||||||
310 | 115,266 | ||||||||||
Less: current portion of long-term debt | (80) | (11,595) | |||||||||
Long-term portion | $ | 230 | $ | 103,671 |
Less than 1 year | $ | 80 | |||
1 to 2 years | 80 | ||||
2 to 3 years | 79 | ||||
3 to 4 years | 61 | ||||
4 to 5 years | 30 | ||||
Thereafter | — | ||||
Total | $ | 330 |
NUMBER OF WARRANTS | AMOUNT | ||||||||||
Balance at November 12, 2020 | 18,687,500 | $ | 12,894 | ||||||||
Conversion to equity upon exercise of warrants | (1,743,850) | (7,132) | |||||||||
Revaluation of derivative warrant liabilities | — | 29,257 | |||||||||
Balance at August 31, 2021 | 16,943,650 | $ | 35,019 |
AUGUST 31, 2021 | NOVEMBER 12, 2020 | ||||||||||
Risk free interest rate | 0.45 | % | 0.30 | % | |||||||
Life of Warrants (years) | 2.20 | 3.00 | |||||||||
Market price of Common Shares | 3.38 | 1.49 | |||||||||
Expected future volatility of Common Shares | 100.00 | % | 92.00 | % | |||||||
Fair value per warrant | 2.07 | 0.69 |
AMOUNT | ||||||||
Balance at March 10, 2021 | $ | 2,740 | ||||||
Revaluation of Top-up Rights | (232) | |||||||
Balance at August 31, 2021 | $ | 2,508 |
AUGUST 31, 2021 | |||||||||||||||||||||||
STOCK OPTIONS | WARRANTS | PSUs | RSUs | ||||||||||||||||||||
Average exercise price | $0.59 - $9.64 | $2.50 | $— | $— | |||||||||||||||||||
Risk free interest rate | 0.40% - 0.76% | 0.46% | 0.92% | 0.88% | |||||||||||||||||||
Expected future volatility of Common Shares | 90.00% - 110.00% | 105.00% | 85.00% | 90.00% | |||||||||||||||||||
Expected life(1) | 1.85 - 4.16 | 2.20 | 5.61 | 5.18 | |||||||||||||||||||
Forfeiture rate | 10% | —% | 25% | —% |
MARCH 10, 2021 | |||||||||||||||||||||||
STOCK OPTIONS | WARRANTS | PSUs | RSUs | ||||||||||||||||||||
Average exercise price | $0.59 - $9.65 | $2.50 | $— | $— | |||||||||||||||||||
Risk free interest rate | 0.26% - 0.76% | 0.38% | 1.01% | 0.93% | |||||||||||||||||||
Expected future volatility of Common Shares | 90.00% | 100.00% | 90.00% | 90.00% | |||||||||||||||||||
Expected life(1) | 2.09 - 4.53 | 2.67 | 6.04 | 5.48 | |||||||||||||||||||
Forfeiture rate | 10% | —% | 25% | —% | |||||||||||||||||||
(1) Exercise price and expected life for stock options were determined using the range of exercise prices disclosed in Note 14(iv) |
NUMBER | WEIGHTED AVERAGE EXERCISE PRICE | ||||||||||
Balance - August 31, 2019 | 8,833,194 | $ | 4.23 | ||||||||
Granted | 2,125,000 | $ | 3.21 | ||||||||
Exercised | (879,240) | $ | 1.21 | ||||||||
Cancelled / Forfeited | (814,633) | $ | 6.20 | ||||||||
Balance - August 31, 2020 | 9,264,321 | $ | 4.05 | ||||||||
Granted | 1,255,000 | $ | 2.72 | ||||||||
Exercised | (1,691,498) | $ | 2.38 | ||||||||
Cancelled / Forfeited | (1,030,550) | $ | 6.76 | ||||||||
Balance - August 31, 2021 | 7,797,273 | $ | 3.84 |
OPTIONS OUTSTANDING | OPTIONS EXERCISABLE | |||||||||||||
Range of Exercise Prices | Quantity Outstanding | Weighted Average Remaining Contractual Life (years) | Quantity Exercisable | |||||||||||
$0.30 - $1.10 | 598,433 | 3.4 | 598,433 | |||||||||||
$1.11 - $2.18 | 892,000 | 7.9 | 524,201 | |||||||||||
$2.19 - $2.44 | 1,630,000 | 7.0 | 1,037,617 | |||||||||||
$2.45 - $3.61 | 1,451,078 | 7.2 | 1,031,695 | |||||||||||
$3.62 - $5.08 | 1,844,211 | 7.5 | 1,471,544 | |||||||||||
$5.09 - $8.02 | 571,251 | 7.2 | 571,251 | |||||||||||
$8.03 - $11.27 | 810,300 | 7.7 | 793,585 | |||||||||||
7,797,273 | 7.1 | 6,028,326 |
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||
Risk free interest rate | 0.42% - 1.62% | 0.45% - 1.65% | |||||||||
Expected life of options | 5.0 - 6.5 years | 5.0 - 6.0 years | |||||||||
Expected annualized volatility | 68% - 98% | 72% - 85% | |||||||||
Expected dividend yield | — | — | |||||||||
Forfeiture rate | 7.5% - 11.4% | 8.0% - 8.7% |
NUMBER | |||||
Balance - August 31, 2019 | 842,362 | ||||
Granted | 265,258 | ||||
Exercised | (154,062) | ||||
Cancelled / Forfeited | (41,718) | ||||
Balance - August 31, 2020 | 911,840 | ||||
Granted | 416,063 | ||||
Exercised | (80,491) | ||||
Cancelled / Forfeited | (61,240) | ||||
Balance - August 31, 2021 | 1,186,172 |
NUMBER | |||||
Balance - August 31, 2019 | — | ||||
Granted | 142,187 | ||||
Exercised | — | ||||
Cancelled / Forfeited | (22,129) | ||||
Balance - August 31, 2020 | 120,058 | ||||
Granted | 440,477 | ||||
Exercised | (1,858) | ||||
Cancelled / Forfeited | (86,830) | ||||
Balance - August 31, 2021 | 471,847 |
YEAR ENDED | |||||||||||||||||||||||
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||||||||||||||
Weighted average number of shares used in basic loss per share | 256,119,930 | 172,668,816 | |||||||||||||||||||||
Stock options | 2,757,798 | 4,540,182 | |||||||||||||||||||||
Warrants | 5,915,606 | — | |||||||||||||||||||||
Top-up rights | 1,129,876 | — | |||||||||||||||||||||
Restricted share units | 1,137,034 | 727,275 | |||||||||||||||||||||
Performance share units | 471,847 | 126,685 | |||||||||||||||||||||
Weighted average number of shares used in diluted loss per share | 267,532,091 | 178,062,958 |
YEAR ENDED | |||||||||||||||||||||||
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||||||||||||||
Stock options | 3,083,378 | 4,382,918 | |||||||||||||||||||||
Top-up rights | 898,566 | — | |||||||||||||||||||||
Warrants | — | — | |||||||||||||||||||||
3,981,944 | 4,382,918 |
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||
Contingent share consideration (i) | $ | 5,538 | $ | 231 | |||||||
Lease liabilities (ii) | 4,651 | 2,617 | |||||||||
$ | 10,189 | $ | 2,848 |
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||
Opening balance, September 1 | $ | 3,705 | $ | — | |||||||
IFRS 16 transition | — | 2,219 | |||||||||
Acquisitions through business combination (Note 28) | 1,742 | — | |||||||||
Lease additions | 1,541 | 2,220 | |||||||||
Lease payments | (1,682) | (897) | |||||||||
Interest expense on lease liabilities | 329 | 163 | |||||||||
Ending balance | 5,635 | 3,705 | |||||||||
Current portion (included in accounts payable and accrued liabilities) | (984) | (1,088) | |||||||||
Long-term portion (included in other liabilities) | $ | 4,651 | $ | 2,617 |
Less than 1 year | $ | 1,359 | |||
1 to 2 years | 1,355 | ||||
2 to 3 years | 1,315 | ||||
3 to 4 years | 1,109 | ||||
4 to 5 years | 576 | ||||
Thereafter | 1,307 | ||||
Total | $ | 7,021 |
Less than 1 year | $ | 355 | |||
1 to 2 years | 355 | ||||
2 to 3 years | 355 | ||||
3 to 4 years | 355 | ||||
4 to 5 years | 59 | ||||
Thereafter | — | ||||
Total undiscounted lease receivable | 1,479 | ||||
Unearned finance income | (106) | ||||
1,373 | |||||
Less: current portion (included in accounts receivable) | (288) | ||||
Net Investment in sub-lease | $ | 1,085 |
ALPHA-CANNABIS PHARMA GMBH (a) | EVIANA HEALTH CORPORATION (b) | HYASYNTH BIOLOGICALS INC. (c) | TOTAL | ||||||||||||||||||||
Participating share (1) | 25.0 | % | 19.9 | % | 46.7 | % | |||||||||||||||||
Balance, August 31, 2019 | $ | 3,496 | $ | 3,000 | $ | 4,612 | $ | 11,108 | |||||||||||||||
Share of net loss | (75) | — | (1,112) | (1,187) | |||||||||||||||||||
Impairment loss | — | (3,000) | — | (3,000) | |||||||||||||||||||
Elimination of proportionate share of transactions with associates | (14) | — | — | (14) | |||||||||||||||||||
Foreign currency translation loss | 94 | — | — | 94 | |||||||||||||||||||
Balance, August 31, 2020 | $ | 3,501 | $ | — | $ | 3,500 | $ | 7,001 | |||||||||||||||
Additions | — | — | 2,500 | 2,500 | |||||||||||||||||||
Transaction costs | — | — | 39 | 39 | |||||||||||||||||||
Share of net loss (2) | (107) | — | (1,011) | (1,118) | |||||||||||||||||||
Impairment loss | (3,266) | — | — | (3,266) | |||||||||||||||||||
Foreign currency translation loss | (128) | — | — | (128) | |||||||||||||||||||
Balance, August 31, 2021 | $ | — | $ | — | $ | 5,028 | $ | 5,028 |
YEAR ENDED | |||||||||||||||||||||||
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||||||||||||||
Salaries and consulting fees | $ | 2,757 | $ | 2,953 | |||||||||||||||||||
Share-based compensation | 2,555 | 2,750 | |||||||||||||||||||||
Total key management compensation | $ | 5,312 | $ | 5,703 |
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||
0-60 days | $ | 20,029 | $ | 11,922 | |||||||
61-120 days | 886 | 73 | |||||||||
Gross trade receivables | $ | 20,915 | $ | 11,995 | |||||||
Less: Expected credit losses and reserve for product returns and price adjustments | (710) | (912) | |||||||||
$ | 20,205 | $ | 11,083 |
Carrying Amount | Contractual Cash Flows | Less than 1 year | 1 to 3 years | 3 to 5 years | More than 5 years | |||||||||||||||
Accounts payable and accrued liabilities | $ | 23,436 | $ | 23,436 | $ | 23,436 | $ | — | $ | — | $ | — | ||||||||
Long-term debt | 310 | 330 | 80 | 220 | 30 | — | ||||||||||||||
$ | 23,746 | $ | 23,766 | $ | 23,516 | $ | 220 | $ | 30 | $ | — |
YEAR ENDED | |||||||||||||||||||||||
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||||||||||||||
Adult-use recreational wholesale revenue (Canadian) | $ | 98,510 | $ | 73,938 | |||||||||||||||||||
Direct to patient medical revenue (Canadian) | 8,701 | 10,748 | |||||||||||||||||||||
International (business to business) | 386 | 3,272 | |||||||||||||||||||||
Wholesale to Licensed Producers and medical wholesale revenue (Canadian) | 2,060 | 15,184 | |||||||||||||||||||||
Other revenue | 202 | 245 | |||||||||||||||||||||
Gross revenue | $ | 109,859 | $ | 103,387 | |||||||||||||||||||
Excise taxes | (30,696) | (16,592) | |||||||||||||||||||||
Net revenue | $ | 79,163 | $ | 86,795 |
YEAR ENDED | |||||||||||||||||||||||
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||||||||||||||
Office and general | $ | 12,787 | $ | 11,819 | |||||||||||||||||||
Wages and benefits | 8,381 | 7,611 | |||||||||||||||||||||
Professional fees | 6,147 | 5,367 | |||||||||||||||||||||
Research & development | 3,450 | 1,269 | |||||||||||||||||||||
Depreciation and amortization | 2,613 | 1,510 | |||||||||||||||||||||
Travel and accommodation | 98 | 383 | |||||||||||||||||||||
Utilities | 89 | 37 | |||||||||||||||||||||
Total general and administrative expenses | $ | 33,565 | $ | 27,996 |
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||
Origination and reversal of temporary differences | $ | (27,244) | $ | (37,875) | |||||||
Change in tax rate and rate differences | 1,292 | 421 | |||||||||
Change in unrecognized temporary differences | 26,026 | 27,245 | |||||||||
Prior period adjustments | (74) | (262) | |||||||||
Total income tax recovery | $ | — | $ | (10,471) |
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||
Loss before income taxes | $ | (130,704) | $ | (146,628) | |||||||
Statutory income tax rate | 29.0 | % | 29.0 | % | |||||||
Tax calculated at statutory rate | (37,904) | (42,522) | |||||||||
Non-deductible (non-taxable) items | 9,514 | 2,643 | |||||||||
Difference between current and future tax rates | 1,292 | 421 | |||||||||
Benefit of deductible temporary differences not recognized | 26,026 | 27,245 | |||||||||
Effect of tax rates in other jurisdictions | 1,144 | 2,016 | |||||||||
Other | (72) | (274) | |||||||||
Income tax recovery | $ | — | $ | (10,471) |
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||
Deferred tax assets are attributable to the following: | |||||||||||
Non-capital losses | $ | 5,078 | $ | 6,670 | |||||||
Lease liabilities | 1,544 | 1,038 | |||||||||
Deferred tax assets | 6,622 | 7,708 | |||||||||
Set-off of tax | (6,622) | (7,708) | |||||||||
Net deferred tax asset | $ | — | $ | — | |||||||
Deferred tax liabilities are attributable to the following: | |||||||||||
Property, plant and equipment | $ | — | $ | (961) | |||||||
Intangibles assets | (652) | — | |||||||||
Biological assets | (1,755) | (170) | |||||||||
Inventories | (2,670) | (5,367) | |||||||||
Right-of-use assets | (1,146) | (1,096) | |||||||||
Net investment in sublease | (398) | — | |||||||||
Other | (1) | (114) | |||||||||
Deferred tax liabilities | (6,622) | (7,708) | |||||||||
Set-off of tax | 6,622 | 7,708 | |||||||||
Net deferred tax liability | $ | — | $ | — |
NET BALANCE AT AUGUST 31, 2020 | RECOGNIZED IN PROFIT OR LOSS | RECOGNIZED DIRECTLY IN EQUITY & OCI | NET BALANCE AT AUGUST 31, 2021 | |||||||||||
Non-capital losses | $ | 6,669 | $ | (1,591) | $ | — | $ | 5,078 | ||||||
Property, plant and equipment | (961) | 961 | — | — | ||||||||||
Intangibles assets | (10) | (642) | — | (652) | ||||||||||
Biological assets | (170) | (1,585) | — | (1,755) | ||||||||||
Inventories | (5,367) | 2,697 | — | (2,670) | ||||||||||
Lease liabilities | 1,038 | 506 | — | 1,544 | ||||||||||
Right-of-use assets | (1,096) | (50) | — | (1,146) | ||||||||||
Net investment in sublease | — | (398) | — | (398) | ||||||||||
Other | (103) | 102 | — | (1) | ||||||||||
Net tax liabilities | $ | — | $ | — | $ | — | $ | — |
NET BALANCE AT AUGUST 31, 2019 | RECOGNIZED IN PROFIT OR LOSS | RECOGNIZED DIRECTLY IN EQUITY & OCI | NET BALANCE AT AUGUST 31, 2020 | |||||||||||
Non-capital losses | $ | 10,708 | $ | (4,039) | $ | — | $ | 6,669 | ||||||
Property, plant and equipment | (4,983) | 4,022 | — | (961) | ||||||||||
Biological assets | (961) | 791 | — | (170) | ||||||||||
Inventories | (15,200) | 9,833 | — | (5,367) | ||||||||||
Lease liabilities | — | 1,038 | — | 1,038 | ||||||||||
Right-of-use assets | — | (1,096) | — | (1,096) | ||||||||||
Other | (35) | (78) | — | (113) | ||||||||||
Net tax (liabilities) assets | $ | (10,471) | $ | 10,471 | $ | — | $ | — |
AUGUST 31, 2021 | |||||
August 31, 2035 | $ | 1,070 | |||
August 31, 2037 | 11,825 | ||||
August 31, 2038 | 14,735 | ||||
August 31, 2039 | 18,254 | ||||
August 31, 2040 | 85,698 | ||||
August 31, 2041 | 76,746 | ||||
$ | 208,328 |
AUGUST 31, 2021 | AUGUST 31, 2020 | ||||||||||
Deductible temporary differences | $ | 31,803 | $ | 17,348 | |||||||
Tax losses | 191,607 | 102,183 | |||||||||
$ | 223,410 | $ | 119,531 |
FAIR VALUE ON ACQUISITION | ||||||||||||||
Assets | ||||||||||||||
Property, plant and equipment | $ | 11,828 | ||||||||||||
Intangibles | 2,685 | |||||||||||||
Deposits on equipment | 2,157 | |||||||||||||
Other assets | 28 | |||||||||||||
Total assets | $ | 16,698 | ||||||||||||
Liabilities | ||||||||||||||
Accounts payable and accrued liabilities | $ | 2,047 | ||||||||||||
Lease liability | 1,742 | |||||||||||||
Total liabilities | $ | 3,789 | ||||||||||||
Total identifiable net assets at fair value | $ | 12,909 | ||||||||||||
Consideration transferred | ||||||||||||||
Equity instruments (5,045,873 common shares) | $ | 22,000 | ||||||||||||
Contingent consideration | 5,249 | |||||||||||||
Working capital adjustment | (19) | |||||||||||||
$ | 27,230 | |||||||||||||
Goodwill arising on acquisition | $ | 14,321 |