Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | May 12, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | IANTHUS CAPITAL HOLDINGS, INC. | |
Entity Central Index Key | 0001643154 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 000-56228 | |
Entity Tax Identification Number | 98-1360810 | |
Entity Address, Address Line One | 420 Lexington Avenue | |
Entity Address, City or Town | Suite 414 | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10170 | |
City Area Code | 646 | |
Local Phone Number | 518-9411 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | Z4 | |
Entity Common Stock, Shares Outstanding | 171,718,192 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash | $ 14,078 | $ 13,244 |
Restricted cash | 2,641 | 3,334 |
Accounts receivable, net of allowance for doubtful accounts of $194 (December 31, 2020 - $401) | 3,687 | 3,595 |
Prepaid expenses | 5,060 | 3,178 |
Inventories, net | 31,950 | 28,692 |
Other current assets | 1,462 | 1,603 |
Current Assets | 58,878 | 53,646 |
Investments | 536 | 568 |
Property, plant and equipment, net | 109,716 | 112,634 |
Right-of-use assets | 32,529 | 30,429 |
Other long-term assets | 3,897 | 8,650 |
Intangible assets | 154,139 | 139,062 |
Total Assets | 359,695 | 344,989 |
Liabilities and Shareholder's Deficit | ||
Accounts payable | 17,296 | 13,636 |
Accrued and other current liabilities | 110,817 | 98,933 |
Current portion of long-term debt, net of issuance costs | 178,562 | 165,381 |
Derivative liabilities | 4 | 16 |
Current portion of lease liabilities | 7,895 | 7,342 |
Current Liabilities | 314,574 | 285,308 |
Long-term debt, net of issuance costs | 16,336 | 27,999 |
Deferred income tax | 31,597 | 27,507 |
Long-term portion of lease liabilities | 29,465 | 27,814 |
Total Liabilities | 391,972 | 368,628 |
Commitments and Contingencies | ||
Shareholders' Deficit | ||
Common shares—no par value. Authorized—unlimited number. 171,718—issued and outstanding (December 31, 2021—171,718—issued and outstanding) | ||
Shares to be issued | 1,531 | 1,531 |
Additional paid-in capital | 777,926 | 776,462 |
Accumulated deficit | (811,734) | (801,632) |
Total Shareholders' Deficit | (32,277) | (23,639) |
Total Liabilities and Shareholders' Deficit | $ 359,695 | $ 344,989 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Statement of Financial Position [Abstract] | |||
Accounts Receivable, Allowance for Credit Loss, Current | $ 15 | $ 27 | |
Common Stock, Shares Authorized | Unlimited | Unlimited | |
Common Stock, No Par Value | $ 0 | $ 0 | |
Common Stock, Shares, Issued | 171,718,000 | 171,718,000 | |
Common Stock, Shares, Outstanding | 171,718,000 | 171,718,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues, net of discounts | $ 42,790 | $ 51,805 |
Costs and expenses applicable to revenues | (20,298) | (22,084) |
Gross profit | 22,492 | 29,721 |
Operating expenses | ||
Selling, general and administrative expenses | 23,406 | 24,228 |
Depreciation and amortization | 8,406 | 6,832 |
Write-downs, recoveries and other charges, net | 57 | 259 |
Total operating expenses | 31,869 | 31,319 |
Loss from operations | (9,377) | (1,598) |
Interest income | 60 | 124 |
Other income | 11,266 | 274 |
Interest expense | (5,894) | (5,678) |
Accretion expense | (766) | (4,852) |
Provision for debt obligation fee | (414) | (414) |
Losses from change in fair value of financial instruments | (102) | (17) |
Loss before income taxes | (5,227) | (12,161) |
Income tax expense | 4,875 | 7,291 |
Net loss | $ (10,102) | $ (19,452) |
Net loss per share—basic and diluted | $ (0.06) | $ (0.11) |
Weighted average number of common shares outstanding—basic and diluted | 171,718 | 171,718 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICIT) EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Capital Stock [Member] | Shares to be Issued [Member] | Additional Paid-in-Capital [Member] | Accumulated Deficit [Member] |
Beginning balance, Shares at Dec. 31, 2020 | 171,718 | ||||
Beginning balance at Dec. 31, 2020 | $ 47,329 | $ 1,531 | $ 769,940 | $ (724,142) | |
Share-based compensation | 1,634 | 1,634 | |||
Net loss | (19,452) | (19,452) | |||
Ending balance, Shares at Mar. 31, 2021 | 171,718 | ||||
Ending balance at Mar. 31, 2021 | 29,511 | 1,531 | 771,574 | (743,594) | |
Beginning balance, Shares at Dec. 31, 2020 | 171,718 | ||||
Beginning balance at Dec. 31, 2020 | 47,329 | 1,531 | 769,940 | (724,142) | |
Net loss | (77,490) | ||||
Ending balance, Shares at Dec. 31, 2021 | 171,718 | ||||
Ending balance at Dec. 31, 2021 | (23,639) | 1,531 | 776,462 | (801,632) | |
Share-based compensation | 1,464 | 1,464 | |||
Net loss | (10,102) | (10,102) | |||
Ending balance, Shares at Mar. 31, 2022 | 171,718 | ||||
Ending balance at Mar. 31, 2022 | $ (32,277) | $ 1,531 | $ 777,926 | $ (811,734) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CASH FLOW FROM OPERATING ACTIVITIES | ||
Net loss | $ (10,102) | $ (19,452) |
Adjustments to reconcile net loss to cashflow from (used in) operations: | ||
Interest income | (60) | (124) |
Interest expense | 5,894 | 5,678 |
Accretion expense | 766 | 4,852 |
Debt obligation fees | 414 | 414 |
Depreciation and amortization | 9,029 | 7,374 |
Write-downs, recoveries and other charges, net | 57 | 259 |
Share-based compensation | 1,464 | 1,634 |
Losses from change in fair value of financial instruments | 102 | 17 |
Gain from nonmonetary consideration from acquisition | (10,460) | |
Deferred income taxes | 8 | |
Change in operating assets and liabilities | 4,647 | 4,792 |
NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES | 1,751 | 5,452 |
CASH FLOW FROM INVESTING ACTIVITIES | ||
Purchase of property, plant and equipment | (1,573) | (4,752) |
Acquisition of other intangible assets | (61) | 0 |
Proceeds from sale of property, plant and equipment | 127 | |
Issuance of related party promissory note | (92) | (375) |
Purchase of subsidiaries, net of cash acquired | 4 | |
NET CASH USED IN INVESTING ACTIVITIES | (1,595) | (5,127) |
CASH FLOW FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of debt | 11,000 | |
Debt issuance costs | (694) | |
Repayment of debt | (15) | (14) |
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (15) | 10,292 |
CASH AND RESTRICTED CASH: | ||
NET INCREASE IN CASH AND RESTRICTED CASH DURING THE YEAR | 141 | 10,617 |
CASH AND RESTRICTED CASH, BEGINNING OF YEAR | 16,578 | 11,510 |
CASH AND RESTRICTED CASH, END OF YEAR | $ 16,719 | $ 22,127 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Note 1 – Organization and Description of Business (a) Description of Business iAnthus Capital Holdings, Inc. (“ICH”, or “iAnthus”), together with its consolidated subsidiaries (the “Company”) was incorporated under the laws of British Columbia, Canada, on November 15, 2013. The Company is a vertically-integrated multi-state owner and operator of licensed cannabis cultivation, processing and dispensary facilities, and developer, producer and distributor of innovative branded cannabis and cannabidiol (“CBD”) products in the United States. Through the Company’s subsidiaries, licenses, interests and contractual arrangements, the Company has the capacity to operate dispensaries and cultivation/processing facilities, and manufacture and distribute cannabis across the states in which the Company operates in the U.S. Additionally, the Company distributes CBD products online and to retail locations across the United States. The Company’s business activities, and the business activities of its subsidiaries, which operate in jurisdictions where the use of marijuana has been legalized under state and local laws, currently are illegal under U.S. federal law. The U.S. Controlled Substances Act classifies marijuana as a Schedule I controlled substance. Any proceeding that may be brought against the Company could have a material adverse effect on the Company’s business plans, financial condition and results of operations. (b) Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements (the “financial statements”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and, therefore, certain information, footnotes and disclosures normally included in the annual financial statements, prepared in accordance with U.S. GAAP, have been condensed or omitted in accordance with SEC rules and regulations. The financial data presented herein should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2021, included in the Company’s Annual Report on the Form 10-K The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the entire year ending December 31, 2022, or any other period. Except as otherwise stated, these unaudited interim condensed consolidated financial statements are presented in U.S. dollars. (c) Going Concern These unaudited interim condensed consolidated financial statements have been prepared under the assumption that the Company will be able to continue its operations and will be able to realize its assets and discharge its liabilities in the normal course of business in the foreseeable future. For the three months ended March 31, 2022, the Company reported a net loss of $10.1 million, operating cash inflows of $1.8 million and an accumulated deficit of $811.7 million as of March 31, 2022. These material circumstances cast substantial doubt on the Company’s ability to continue as a going concern for a period at least 12 months from the date of this report and ultimately on the appropriateness of the use of the accounting principles applicable to a going concern. During the three months ended March 31, 2022, due to liquidity constraints, the Company did not make interest payments due to the lenders (the “Secured Lenders”) of the Company’s senior secured convertible debentures (the “Secured Notes”) and the lenders (the “Unsecured Lenders” and together with the Secured Lenders, the “Lenders”) of the Company’s 8% convertible unsecured debentures (the “Unsecured Debentures”). The Company is currently in default with respect to certain of its long-term debt, which, as of March 31, 2022, consists of As a result of the March 31, 2020 default, the Board of Directors of the Company (the “Board” or the “Board of Directors”) formed a special committee comprised of the Company’s then five independent, non-management COVID-19 (“COVID-19”), • renegotiation of existing financing arrangements and other material contracts, including any amendments, waivers, extensions or similar agreements with the Lenders and/or stakeholders of the Company and/or its subsidiaries that the Special Committee determines are in the best interest of the Company and/or its subsidiaries; • managing available sources of capital, including equity investments or debt financing or refinancing and the terms thereof; • implementing the operational and financial restructuring of the Company and its subsidiaries and their respective businesses, assets and licensure and other rights; and • implementing other potential strategic transactions. The Special Committee engaged Canaccord Genuity Corp. as its financial advisor to assist the Special Committee in analyzing various strategic alternatives to address its capital structure and liquidity challenges. On June 22, 2020, the Company received notice from Gotham Green Admin 1, LLC (the “Collateral Agent”), as collateral agent holding security for the benefit of the Secured Lenders, with a demand for repayment (the “Demand Letter”) under the Amended and Restated Secured Debenture Purchase Agreement dated October 10, 2019 (the “Secured Notes Purchase Agreement”) of the entire principal amount of the Secured Notes, together with interest, fees, costs and other allowable charges that had accrued or might accrue in accordance with the Secured Notes Purchase Agreement and the other Transaction Agreements (as defined in the Secured Notes Purchase Agreement). The Collateral Agent also concurrently provided the Company with a Notice of Intention to Enforce Security (the “BIA Notice”) under section 244 of the Bankruptcy and Insolvency Act (Canada) (the “BIA”). On July 10, 2020, the Company and certain of its subsidiaries entered into a restructuring support agreement (as amended, the “Restructuring Support Agreement”) with the Secured Lenders and certain of the Unsecured Lenders (the “Consenting Unsecured Lenders”) to affect a proposed recapitalization transaction (the “Recapitalization Transaction”). Under the Restructuring Support Agreement, certain of the Secured Lenders agreed to provide interim financing in the amount of $14.7 million (the “Tranche Four Secured Notes”). Refer Note 14 for further details regarding the proposed transaction. Subject to compliance with the Restructuring Support Agreement, the Secured Lenders and the Consenting Unsecured Lenders will forbear from further exercising any rights or remedies in connection with any events of default of the Company occurring under their respective agreements and will stop any current or pending enforcement actions with respect to the same, including as set forth in the Demand Letter. Pursuant to the terms of the Restructuring Support Agreement, the Recapitalization Transaction would be implemented pursuant to arrangement proceedings (“Arrangement Proceedings”) commenced under the British Columbia Business Corporations Act, or, only if necessary, the Companies’ Creditors Arrangement Act (Canada) (“CCAA”). Completion of the Recapitalization Transaction through the Arrangement Proceedings is subject to, among other things, requisite stakeholder approval of the plan of arrangement (the “Plan of Arrangement”). On September 14, 2020, the Company held meetings at which the stakeholders approved the Plan of Arrangement. Following the stakeholder vote, on September 25, 2020, the Company attended a court hearing before the Supreme Court of British Columbia (the “Court”) to receive approval of the Plan of Arrangement. On October 5, 2020, the Company received final approval from the Court for the Plan of Arrangement. On November 5, 2020, the Company received a notice of appeal with respect to the final approval for the Plan of Arrangement by the Court, and on January 29, 2021, the appeal was dismissed by the British Columbia Court of Appeal. Because the Company received the necessary approvals of the Plan of Arrangement from the Court, Secured Lenders, Unsecured Lenders and the holders of the Company’s common shares, options and warrants, the Recapitalization Transaction will be implemented through the British Columbia Business Corporations Act and not the CCAA. The Company may be required to obtain other necessary approvals with respect to the Plan of Arrangement, including approvals by state-level regulators and the Canadian Securities Exchange (collectively, the “Requisite Approvals”). Specifically, certain of the transactions contemplated by the Recapitalization Transaction have triggered the requirement for an approval by state-level regulators in certain U.S. states with jurisdiction over the licensed cannabis operations of entities owned, in whole or in part, or controlled, directly or indirectly, by the Company in such states. On February 23, 2021, the Nevada Cannabis Compliance Board approved the proposed change of ownership and control of the Company’s wholly-owned subsidiary, GreenMart of Nevada NLV, LLC (“GMNV”), contemplated by the Recapitalization Transaction. On June 17, 2021, the Massachusetts Cannabis Control Commission (the “CCC”) approved the proposed change of ownership and control of the current licenses held by the Company’s wholly-owned subsidiaries, Mayflower Medicinals, Inc. (“Mayflower”) and Cannatech Medicinals, Inc. (“Cannatech”), contemplated by the Recapitalization Transaction (the “June 17 Approval”). On June 15, 2021, the Company and the Lenders agreed to amend the date by which the Recapitalization Transaction pursuant to the Plan of Arrangement is required to be implemented by from June 30, 2021 to August 31, 2021 (the “Outside Date”). On August 12, 2021, Mayflower’s pending application for a Marijuana Establishment retail license for its Allston, Massachusetts retail location (the “Allston Retail License”) was approved by the CCC at its August 2021 public meeting. As a result of such August 12, 2021 approval, Mayflower was required to submit a new change of ownership and control application to the CCC in connection with the Recapitalization Transaction with respect to the Allston Retail License (the “New COC Application”). The New COC Application was submitted by Mayflower on November 10, 2021 and is currently pending before the CCC. The New COC Application must be approved by the CCC before the June 17 Approval can be effectuated. On August 20, 2021, Gotham Green Partners, LLC and Gotham Green Admin 1, LLC (the “Applicants”) filed a Notice of Application (the “Application”) with the Ontario Superior Court of Justice Commercial List (“OSCJ”), which sought, among other things, a declaration that the Outside Date be extended to the date on which any regulatory approval or consent condition to implementation of the Plan of Arrangement is satisfied or waived. On August 24, 2021, the Company and Applicants appeared for a case conference before the OSCJ at which the OSCJ issued an endorsement (the “Stay Order”) that required the parties to the Restructuring Support Agreement to maintain the status quo until the hearing on September 23, 2021. Specifically, the Stay Order provided that the parties shall remain bound by the Restructuring Support Agreement and not take any steps to advance or impede the regulatory approval process for the closing of the Recapitalization Transaction or otherwise have any communication with the applicable state-level regulators concerning the Recapitalization Transaction or the other counterparties to the Restructuring Support Agreement. On September 23, 2021, the parties appeared before the OSCJ for a hearing on the Application. Following this hearing, the OSCJ issued an endorsement that extended the Stay Order from September 23, 2021 until 48 hours after the release of the OSCJ’s decision on the merits of the Application. On October 12, 2021, the OSCJ issued its decision granting the Applicant’s relief sought in the Application (the “Decision”). Specifically, the OSCJ granted the declaration sought by the Applicants and ordered that the Outside Date be extended to the date on which any regulatory approval or consent condition to implementation of the Plan of Arrangement is satisfied or waived. On November 10, 2021, the Company filed a Notice of Appeal with the Ontario Court of Appeal and a hearing on the appeal is scheduled for June 9, 2022. On August 20, 2021, the Vermont Department of Public Safety (the “DPS”) confirmed that the DPS does not require prior approval of the Recapitalization Transaction, except for background checks of the prospective new directors and Interim Chief Executive Officer of the Company to be appointed upon the closing of the Recapitalization Transaction, which background checks have been completed. On October 29, 2021, the Florida Department of Health, Office of Medical Marijuana Use (the “OMMU”) approved the proposed change of ownership and control of the Company’s wholly-owned subsidiary, McCrory’s Sunny Hill Nursery, LLC (“McCrory’s”) contemplated by the Recapitalization Transaction (the “Variance Request”). On November 19, 2021, a petition (as amended, the “Petition”) was filed by certain petitioners (the “Petitioners”) with the OMMU challenging the OMMU’s approval of the Variance Request and requesting a formal administrative hearing before an administrative law judge (“ALJ”) at the Florida Division of Administrative Hearings. As a result of the Petition, the OMMU informed the Company that the OMMU’s prior approval of the Variance Request is not an enforceable agency order until such time that there is a final resolution of the Petition and a final agency order is issued by the OMMU. On May 4, 2022, the OMMU issued a final agency order, accepting the recommendation of the ALJ and dismissing the Petition. On April 1, 2022, the Maryland Medical Cannabis Commission (the “MMCC”) approved the proposed change of ownership and control of the Company’s wholly-owned subsidiary, S8 Management, LLC (“S8”), contemplated by the Recapitalization Transaction. S8 currently controls State-level regulatory approvals remain outstanding in Massachusetts, New Jersey, and New York. On January 7, 2022, the New Jersey Cannabis Regulatory Commission (“CRC”) approved the Company’s acquisition The Company believes that the financing transactions received to date should provide the necessary funding for the Company to continue as a going concern. However, there can be no assurance that capital, when needed, will be available on terms acceptable to the Company, or at all. As such, these material circumstances cast substantial doubt on the Company’s ability to continue as a going concern for a period no less than 12 months from the date of this report. These unaudited interim condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. (d) Basis of Consolidation The unaudited interim condensed consolidated financial statements include the accounts of the Company together with its consolidated subsidiaries, except for subsidiaries which the Company has identified as variable interest entities where the Company is not the primary beneficiary. (e) Use of Estimates The preparation of the unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgements that affect the application of accounting policies and the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of unaudited interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations regarding future events that are believed to be reasonable under the circumstances. Actual results may differ significantly from these estimates. Significant estimates made by management include, but are not limited to: economic lives of leased assets; inputs used in the valuation of inventory; allowances for potential uncollectability of accounts and notes receivable; provisions for inventory obsolescence; impairment assessment of long- lived assets; depreciable lives of property, plant and equipment; useful lives of intangible assets; accruals for contingencies including tax contingencies; valuation allowances for deferred income tax assets; estimates of fair value of identifiable assets and liabilities acquired in business combinations; estimates of fair value of derivative instruments; and estimates of the fair value of stock-based payment awards. (f) Change in Estimates In January 2021, the Company completed an assessment of the yield per gram that is used as an input to value the Company’s inventory. The timing of this review was based on a combination of factors accumulating over time that provided the Company with updated information to make a better estimate on the yield of its products. These factors included enhanced data gathering of crop production and yields into inventory. The assessment resulted in a revision of the Company’s production yield estimates that are used to value ending inventory. The effect of this change was an increase in costs and expenses applicable to revenues of approximately $2.9 million in the first quarter of 2021. (g) Coronavirus Pandemic In March 2020, the World Health Organization declared the global emergence of the COVID-19 COVID-19. Any such alterations or modifications could cause substantial interruption to the Company’s business and could have a material adverse effect on the Company’s business, operating results, financial condition, and the trading price of the Company’s common shares, and could include temporary closures of one or more of the Company’s facilities; temporary or long-term labor shortages; temporary or long-term adverse impacts on the Company’s supply chain and distribution channels; and the potential of increased network vulnerability and risk of data loss resulting from increased use of remote access and removal of data from the Company’s facilities. In addition, COVID-19 It is unknown whether and how the Company may be impacted if the COVID-19 COVID-19 Although, the Company has been deemed essential and/or has been permitted to continue operating its facilities in the states in which it cultivates, processes, manufactures, and sells cannabis during the pendency of the COVID-19 adult-use (h) Reclassification Certain prior year amounts have been reclassified to conform with the current year’s presentation. These reclassifications adjustment had no effect on the Company’s previously reported unaudited interim condensed consolidated statement of operations. The following table summarizes the effects of reclassification adjustment on the line items within the Company’s unaudited interim condensed consolidated statements of operations: Prior Year’s Line item Reclassified Amount Current Year’s Line item Depreciation and amortization $ 542 Selling, general and administrative expenses Depreciation and amortization (542 ) Depreciation and amortization (i) Revision of Prior Period Financial Statements During the three months ended March 31, 2022, the Company determined that it had not appropriately recorded cost of inventory as of December 31, 2021. This resulted in an overstatement of the inventory balance, accrued and other current liabilities, income tax expense and accumulated deficit as of December 31, 2021, and an understatement of costs and expenses applicable to revenues for the year ended December 31, 2021. Based on an analysis of Accounting Standards Codification (“ASC”) 250 – “Accounting Changes and Error Corrections” (“ASC 250”), Staff Accounting Bulletin 99 – “Materiality” (“SAB 99”) and Staff Accounting Bulletin 108 – “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”), the Company determined that these errors were immaterial to the previously issued financial statements, and as such no restatement was necessary. Correcting prior period financial statements for immaterial errors would not require previously filed reports to be amended. The effect of the adjustments on the line items within the Company’s consolidated balance sheet as of December 31, 2021 is as follows: December 31, 2021 As Adjustment As adjusted Inventories $ 30,447 $ (1,755 ) $ 28,692 Current assets 55,401 (1,755 ) 53,646 Total assets 346,744 (1,755 ) 344,989 Accrued and other current liabilities 99,446 (513 ) 98,933 Current liabilities 285,821 (513 ) 285,308 Total liabilities 369,141 (513 ) 368,628 Accumulated deficit (800,390 ) (1,242 ) (801,632 ) Total shareholders’ deficit (22,397 ) (1,242 ) (23,639 ) Total liabilities and shareholders’ deficit 346,744 (1,755 ) 344,989 The effect of the adjustments on the line items within the Company’s consolidated statement of operations as of December 31, 2021 is as follows: Year Ended December 31, 2021 As Adjustment As adjusted Costs and expenses applicable to revenues $ (91,735 ) $ (1,755 ) $ (93,490 ) Gross profit 111,283 (1,755 ) 109,528 Loss from operations (22,025 ) (1,755 ) (23,780 ) Loss from operations before income tax (53,999 ) (1,755 ) (55,754 ) Income tax expense 22,249 (513 ) 21,736 Net loss (76,248 ) (1,242 ) (77,490 ) Earnings per share (0.44 ) (0.01 ) (0.45 ) The effect of the adjustments on the line items within the Company’s interim condensed consolidated statements of changes in shareholders’ deficit for the three months ended March 31, 2022 is as follows: March 31, 2022 As Adjustment As adjusted Accumulated deficit – Balance January 1, 2022 $ (800,390 ) $ (1,242 ) $ (801,632 ) Total Shareholders’ deficit – Balance January 1, 2022 (22,397 ) (1,242 ) (23,639 ) |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | Note 2 – Leases The Company mainly leases office space and cannabis cultivation, processing and retail dispensary space. Leases with an initial term of less than 12 months are not recorded on the unaudited interim condensed consolidated balance sheets. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to five years or more. The Company has determined that it was reasonably certain that the renewal options on the majority of its cannabis cultivation, processing and retail dispensary space would be exercised based on operating history and knowledge, current understanding of future business needs and the level of investment in leasehold improvements, among other considerations. The incremental borrowing rate used in the calculation of the lease liability is based on the rate available to the parent company. The depreciable life of assets and leasehold improvements are limited by the expected lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Certain subsidiaries of the Company rent or sublease certain office space to/from other subsidiaries of the Company. These intercompany subleases are eliminated on consolidation and have lease terms ranging from less than 1 year to 15 years. Maturities of lease liabilities for operating leases as of March 31, 2022, were as follows: Operating 2023 $ 7,895 2024 7,892 2025 8,065 2026 8,161 2027 7,835 Thereafter 58,473 Total lease payments $ 98,321 Less: interest expense (60,961 ) Present value of lease liabilities $ 37,360 Weighted-average remaining lease term (years) 11.4 Weighted-average discount rate 20 % For the three months ended March 31, 2022, the Company recorded operating lease expenses of $2.2 million (March 31, 2021—$2.4 million), which are included in selling, general and administrative expenses on the unaudited interim condensed consolidated statements of operations. The Company has entered into multiple sublease agreements pursuant to which it serves as lessor to the sublessees. The gross rental income and underlying lease expense are presented gross on the Company’s unaudited interim condensed consolidated balance sheets. For the three months ended March 31, 2022, the Company recorded sublease income of $0.2 million (March 31, 2021—$Nil), which is included in other income on the unaudited interim condensed consolidated statements of operations. Supplemental balance sheet information related to leases are as follows: Balance Sheet Information Classification March 31, December 31, Right-of-use Operating leases $ 32,529 $ 30,429 Lease Liabilities Current portion of lease liabilities Operating leases $ 7,895 $ 7,342 Long-term lease liabilities Operating leases 29,465 27,814 Total $ 37,360 $ 35,156 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3—Inventories Inventories are March 31, December 31, (Revised) Supplies $ 6,744 $ 6,188 Raw materials 8,059 5,641 Work in process 8,444 9,464 Finished goods 8,703 7,399 Total $ 31,950 $ 28,692 Inventories are written down for any obsolescence or when the net realizable value considering future events and conditions is less than the carrying value. For the three months ended March 31, 2022, the Company recorded $0.3 million (March 31, 2021 – $0.2 million), related to spoiled inventory in costs and expenses applicable to revenues on the unaudited interim condensed consolidated statements of operations. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
Acquisitions | Note 4 – Acquisitions Acquisition of MPX New Jersey LLC On February 1, 2022, the Company’s wholly-owned subsidiary, iAnthus New Jersey, LLC (“INJ”), closed on its acquisition of MPX NJ, a New Jersey-based entity with a New Jersey medical cannabis permit. , permit build-out This transaction was treated as an asset acquisition under U.S. GAAP as substantially all of the fair value of the gross assets acquired were deemed to be associated with the acquired cultivation, production and retail licenses recognized as intangible assets in the table below. The following table summarizes the allocation of the purchase price to the fair values assigned to the assets acquired and liabilities assumed: Consideration Cash $ 1 Settlement of pre-existing 19,193 Fair value of consideration $ 19,194 Assets acquired and liabilities assumed Cash $ 5 Fixed assets 100 Other non-current 15 Intangible assets 19,100 Accounts payable (15 ) Accrued and other current liabilities (11 ) Net assets acquired $ 19,194 The Company has determined that this acquisition is an asset acquisition under ASC Operating results have been included in these unaudited interim condensed consolidated financial statements from the date of the acquisition. Supplemental pro forma financial information has not been presented as the impact was not material to the Company’s unaudited interim condensed consolidated financial statements. The Company recorded acquisition costs of $0.2 million and $Nil within selling, general and administrative expenses on the unaudited interim condensed consolidated statement of operations for the three months ended March 31, 2022 and 2021, respectively. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 5—Long-Term Debt Secured Notes (1) May 2019 March 2019 Other Total As of January 1, 2022 $ 134,902 $ 24,033 $ 33,138 $ 1,307 $ 193,380 Fair value of financial liabilities issued 767 — — — 767 Accretion of balance 193 200 373 — 766 Repayment — — — (15 ) (15 ) As of March 31, 2022 $ 135,862 $ 24,233 $ 33,511 $ 1,292 $ 194,898 (1) This amount includes the Company’s obligation to pay an exit fee of $10.0 million that accrues interest at a rate of 13% per annum (the “Exit Fee”) under the Secured Notes. As of March 31, 2022, the total and unamortized discount costs were $30.3 million and $2.7 million, respectively (December 31, 2021—$30.3 million and $3.2 million, respectively). As of March 31, 2022, the total and unamortized debt issuance costs were $7.7 million and $2.2 million, respectively (December 31, 2021—$7.7 million and $2.5 million, respectively). As of March 31, 2022, the total interest accrued on both current and long-term debt was $51.1 million (December 31, 2021—$45.6 million). (a) Secured Notes Tranche One On May 14, 2018, the Company issued $40.0 million secured notes (the “Tranche One Secured Notes”) with a maturity date of May 14, 2021. The principal amount of such notes will remain outstanding until the closing of the Recapitalization Transaction. Interest on the Tranche One Secured Notes will continue to accrue at the default rate of 16.0% per annum until such time. Due to the conversion price of $3.08 being less than the Company’s closing stock price on the date of issuance, this gave rise to a beneficial conversion feature valued at $7.9 million. The Company recognized this beneficial conversion feature as a debt discount and additional paid in capital on the closing date. The discount to the Tranche One Secured Notes was For the three months ended March 31, 2022, interest expense and accretion expense of $1.7 million and $Nil, respectively, (March 31, 2021—$1.7 million and $2.3 million, respectively), were recorded on the unaudited interim condensed consolidated statements of operations. As of March 31, 2020, the Company was not in compliance with the market value test and the Company did not make interest payments, therefore in breach of a financial covenant for the Tranche One Secured Notes, Tranche Two Secured Notes (as defined herein), and Tranche Three Secured Notes (as defined herein). Furthermore, the Company was in default on its Secured Notes as of March 31, 2020, and as a result, an event of default occurred on April 4, 2020. This default was triggered on the Company’s long-term debt, which as of March 31, 2022, consisted of $97.5 million and $60.0 million of principal amount and $34.8 million and $10.8 million in accrued interest on the Secured Notes and the Unsecured Debentures, respectively. As a result of the default, the Company is classifying the Tranche One Secured Notes, Tranche Two Secured Notes, and Tranche Three Secured Notes as current liabilities on the unaudited interim condensed consolidated balance sheets. As of March 31, 2022, the Company is still in default on the Tranche One Secured Notes, Tranche Two Secured Notes, and Tranche Three Secured Notes. Further details on the default are disclosed in Note 14. For the three months ended March 31, 2022, interest expense of $0.4 million (March 31, 2021 – $0.4 million), was recorded in relation to the Exit Fee on the unaudited interim condensed consolidated statements of operations. As of March 31, 2022, the Company accrued $15.8 million (March 31, 2021—$14.2 million) related to the Exit Fee, comprised of an aggregate principal amount of $10.3 million and $5.5 million in accrued interest (March 31, 2021 – an aggregate principal amount of $10.3 million and $3.9 million in accrued interest). Furthermore, as a result of this default, the Company is classifying the Exit Fee as a current liability on the unaudited interim condensed consolidated balance sheets as of March 31, 2022. Tranche Two On September 30, 2019, the Company issued an additional $20.0 million of secured notes (the “Tranche Two Secured Notes”). The Tranche Two Secured Notes accrue interest at 13.0% per annum and had an original maturity date of May 14, 2021. The principal amount of such notes will remain outstanding until the closing of the Recapitalization Transaction. Interest on the Tranche Two Secured Notes will continue to accrue at the default rate of 16.0% per annum until such time. For the three months ended March 31, 2022, interest expense and accretion expense of $0.8 million and $Nil, respectively, (March 31, 2021—$0.8 million and $0.5 million, respectively), were recorded on the unaudited interim condensed consolidated statements of operations. All terms, restrictions and financial covenants applicable to the Tranche One Secured Notes are also applicable to Tranche Two Secured Notes. Tranche Three On December 20, 2019, the Company issued an additional $36.2 million of secured notes (the “Tranche Three Secured Notes”). The Tranche Three Secured Notes accrue interest at 13.0% per annum and had an original maturity date of May 14, 2021. The principal amount of such notes will remain outstanding until the closing of the Recapitalization Transaction. Interest on the Tranche Three Secured Notes will continue to accrue at default rate of 16.0% per annum until such time. For the three months ended March 31, 2022, interest expense and accretion expense of $1.4 million and $Nil, respectively, (March 31, 2021—$1.4 million and $1.1 million, respectively), were recorded on the unaudited interim condensed consolidated statements of operations. All terms, restrictions and financial covenants applicable to the Tranche One Secured Notes and Tranche Two Secured Notes are also applicable to Tranche Three Secured Notes. Tranche Four On July 13, 2020, as part of the Recapitalization Transaction, the Company issued an additional $14.7 million as the Tranche Four Secured Notes. The Tranche Four Secured Notes accrue interest at 8.0% per annum and mature on July 13, 2025. For the three months ended March 31, 2022, interest expense and accretion expense of $0.3 million and $0.1 million, respectively, (March 31, 2021—$0.3 million and $0.1 million, respectively), were recorded on the unaudited interim condensed consolidated statements of operations. All terms, restrictions, and financial covenants applicable to the Tranche One Secured Notes, Tranche Two Secured Notes, and Tranche Three Secured Notes discussed above, are also applicable to the Tranche Four Secured Notes. The Company remains in default with respect to the Tranche One Secured Notes, Tranche Two Secured Notes and Tranche Three Secured Notes, due to failure to remit applicable interest payments between March 2020 and March 2022. Therefore, all amounts owing on the Tranche One Secured Notes, Tranche Two Secured Notes and Tranche Three Secured Notes are classified as current liabilities on the unaudited interim condensed consolidated balance sheets. As interest on the Tranche Four Secured notes is paid in kind by adding the accrued amount to the principal amount, the Company is currently in compliance with the Tranche Four Secured Notes as of March 31, 2022. Therefore, the Tranche Four Secured Notes are classified as long-term liabilities on the unaudited interim condensed consolidated balance sheets. iAnthus New Jersey, LLC Senior Secured Bridge Notes On February 2, 2021, INJ issued an aggregate The host debt, classified as a liability, was recognized at the fair value of $10.3 million, net of issuance costs of $0.7 million. Interest is to be paid in kind by adding the interest accrued on the principal amount on the last day of each fiscal quarter (the first such interest payment date being March 31, 2021) and such amount thereafter becoming part of the principal amount and will accrue interest. Interest paid in kind will be payable on the date that all of the principal amount is due and payable. For the three months ended March 31, 2022, interest expense and accretion expense of $0.4 million and $0.1 million, respectively, (March 31, 2021—$0.2 million and $0.1 million, respectively), were recorded on the unaudited interim condensed consolidated statements of operations. As of March 31, 2022, the Company held $2.6 million (December 31, 2021—$3.3 million) of restricted cash in escrow from the Senior Secured Bridge Notes. Refer to Note 13 for further discussion. The Senior Secured Bridge Notes are secured by a security interest in certain assets of INJ. The Company provided a guarantee in respect of all of the obligations of INJ under the Senior Secured Bridge Notes, and the Company is in compliance with the Senior Secured Bridge Notes as of March 31, 2022. The Senior Secured Bridge Notes are classified as current liabilities on the unaudited interim condensed consolidated balance sheets as they are set expire on February 2, 2023. (b) March 2019 Debentures On March 18, 2019, the Company completed a private placement of $35.0 million of unsecured convertible debentures (the “March 2019 Debentures”) and corresponding warrants to purchase 2,177,291 common shares of the Company at an exercise price of $6.43 per share (“March 2019 Equity Warrants”). All of the March 2019 Equity Warrants For the three months ended March 31, 2022, interest expense and accretion expense of $0.7 million and $0.4 million, respectively, (March 31, 2021—$0.7 million and $0.4 million, respectively), were recorded on the unaudited interim condensed consolidated statements of operations. The terms of the March 2019 Debentures impose certain restrictions on its operating and financing activities, including certain restrictions on the Company’s ability to incur certain additional indebtedness at the subsidiary level. As of March 31, 2022, the Company is still in default on its interest obligations to the holders of the Secured Notes. This default triggered a cross-default on its interest obligations to the holders of the March 2019 Debentures. Further, as a result of this default the Company is classifying the debt as a current liability on the unaudited interim condensed consolidated balance sheets as the Unsecured Debentures are due on demand. The event of default is applicable to all amounts outstanding under the Unsecured Debentures. (c) May 2019 Debentures On May 2, 2019, the Company completed a private placement of $25.0 million of unsecured convertible debentures (the “May 2019 Debentures”) and corresponding warrants to purchase 1,555,207 common shares of the Company at an exercise price of $6.43 per common share (“May 2019 Equity Warrants”). All of the May 2019 Equity Warrants expired on For the three months ended March 31, 2022, interest expense and accretion expense of $0.5 million and $0.2 million, respectively, (March 31, 2021—$0.5 million and $0.2 million, respectively), were recorded on the unaudited interim condensed consolidated statements of operations. The terms of the May 2019 Debentures impose certain restrictions on its operating and financing activities, including certain restrictions on the Company’s ability to incur certain additional indebtedness at the subsidiary level. As of March 31, 2022 the Company is still in default on its interest obligations to the holders of the Secured Notes. This default triggered a cross-default on its interest obligations to the holders of the May 2019 Debentures. Further, as a result of this default the Company is classifying the debt as a current liability on the unaudited interim condensed consolidated balance sheets as the Unsecured Debentures are due on demand. The event of default is applicable to all amounts outstanding under the Unsecured Debentures. |
Share Capital
Share Capital | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Share Capital | Note 6—Share Capital (a) Share Capital Authorized: Unlimited common shares. The shares have no par value. The Company’s common shares are voting and dividend-paying. There were no common share issuances for the three months ended March 31, 2022 and 2021. (b) Warrants The following table summarizes certain information in respect of the Company’s warrants: March 31, 2022 Units Weighted Average Exercise Warrants outstanding, beginning 22,640 $ 3.56 Granted — — Exercised — — Expired (4,685 ) 7.53 Warrants outstanding, ending 17,955 $ 2.49 As of March 31, 2022 and December 31, 2021, warrants classified as derivative liabilities on the unaudited interim condensed consolidated balance sheets were revalued with the following inputs: March 31, 2022 December 31, 2021 Risk-free interest rate 0.9 % 0.9 % Expected dividend yield 0.0 % 0.0 % Expected volatility 124.0 -137.1 % 93.7 -297.1 % Expected life 0.9 years 0.9 years The Company uses an expected volatility based on its historical trading data. The revaluation of the warrants classified as derivative liabilities resulted in a fair value of less than $0.1 million for these instruments as of March 31, 2022 (December 31, 2021 – less than $0.1 million). As a result of the revaluation, the Company recognized a gain of less than $0.1 million for the three months ended March 31, 2022 (March 31, 2021 – loss of less than $0.1 million), on the unaudited interim condensed consolidated statements of operations. Full share equivalent warrants outstanding and exercisable are as follows: March 31, 2022 December 31, 2021 Year of expiration Number Weighted Average Number Weighted Average 2022 16,170 2.26 20,855 3.47 2023 1,785 4.57 1,785 4.57 Warrants outstanding 17,955 $ 2.49 22,640 $ 3.56 (c) Potentially Dilutive Securities The following table summarizes potentially dilutive securities, and the resulting common share equivalents outstanding as of March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 Common share options 9,620 10,504 Warrants 17,955 22,640 Secured notes 46,458 46,458 Debentures 10,135 10,135 MPX dilutive instruments (1) 408 408 Total 84,576 90,145 (1) Prior to the acquisition of MPX Bioceutical Corporation (“MPX”) on February 5, 2019 (the “MPX Acquisition”), MPX had instruments outstanding that were potentially dilutive and as a result of the MPX Acquisition, the Company assumed certain of these instruments. Total potentially dilutive securities does not include the shares that would potentially be issued upon conversion of the accrued interest on the Company’s long-term debt. As of March 31, 2022, this would amount to 18.4 million common shares (December 31, 2021 – 16.4 million common shares). (d) Stock Options The following table summarizes certain information in respect of option activity under the Company’s stock option plan: March 31, 2022 December 31, 2021 Units Weighted Weighted Units Weighted Weighted Options outstanding, beginning 10,504 $ 4.95 — 11,510 $ 4.86 — Granted — — — — — — Exercised — — — — — — Forfeited/Expired (884 ) 4.79 — (1,006 ) 3.96 — Options outstanding, ending 9,620 $ 4.96 5.97 10,504 $ 4.95 6.24 The related share-based compensation expense for the three months ended March 31, 2022 was $1.5 million (March 31, 2021—$1.6 million), and is presented in selling, general and administrative expenses on the unaudited interim condensed consolidated statements of operations. As of March 31, 2022, the weighted average period over which compensation cost on non-vested $ |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7—Income Taxes The following table summarizes the Company’s income tax expense and effective tax rates for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 Loss before income taxes $ (5,227 ) $ (12,161 ) Income tax expense 4,875 7,291 Effective tax rate (93.3 )% (60.0 )% The effective tax rate may vary significantly from period to period and can be influenced by many factors. These factors include, but are not limited to, changes to the statutory rates in the jurisdictions where the Company has operations and changes in the valuation of deferred tax assets and liabilities. The difference between the effective tax rate and the federal statutory rate of 21% primarily relates to certain non-deductible non-cultivator The Internal Revenue Service filed a Notice of Federal Tax Lien against GHHIA Management Inc. on February 23, 2022. The lien is for corporate income taxes, penalties and interest owed by the Company for its tax year ended December 31, 2020. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Note 8—Segment Information The below table presents revenues by segment for the three months ended March 31, 2022 and 2021: Reportable Segments Three Months Ended March 31, 2022 2021 Revenues Eastern Region $ 24,785 $ 33,056 Western Region 17,716 18,302 Other (1) 289 447 Total $ 42,790 $ 51,805 Gross profit (loss) Eastern Region $ 16,068 $ 21,162 Western Region 6,411 8,580 Other 13 (21 ) Total $ 22,492 $ 29,721 Depreciation and amortization Eastern Region $ 5,259 $ 5,876 Western Region 3,012 757 Other 135 199 Total $ 8,406 $ 6,832 Write-downs, (recoveries) and other charges, net Eastern Region $ 69 $ 259 Western Region — — Other (12 ) — Total $ 57 $ 259 Net income (loss) Eastern Region $ 7,328 $ 2,916 Western Region (913 ) 335 Other (16,517 ) (22,703 ) Total $ (10,102 ) $ (19,452 ) Purchase of property, plant and equipment Eastern Region $ 1,220 $ 4,745 Western Region 351 3 Other 2 4 Total $ 1,573 $ 4,752 Purchase of intangibles Eastern Region $ — $ — Western Region — — Other 61 — Total $ 61 $ — (1) Revenues from segments below the quantitative thresholds are attributable to an operating segment of the Company that includes revenue from the sale of CBD products throughout the United States. This segment has never met any of the quantitative thresholds for determining reportable segments nor does it meet the qualitative criteria for aggregation with the Company’s reportable segments. March 31, December 31, 2022 2021 (Revised) Assets Eastern Region $ 240,291 $ 222,350 Western Region 103,441 106,485 Other 15,963 16,154 Total $ 359,695 $ 344,989 Major Customers Major customers are defined as customers that each individually accounted for greater Geographic Information As of March 31, 2022 and 2021, substantially all of the Company’s assets were located in the United States and all of the Company’s revenues were earned in the United States. Disaggregated Revenues The Company disaggregates revenues into categories that depict how the nature, amount, timing and uncertainty of the revenues and cashflows are affected by economic factors. For the three months ended March 31, 2022 and 2021, the Company disaggregated its revenues as follows: Three Months Ended March 31, 2022 2021 Revenue iAnthus branded products $ 22,158 $ 31,182 Third party branded products 17,147 15,207 Wholesale/bulk/other products 3,485 5,416 Total $ 42,790 $ 51,805 |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2022 | |
Text Block [Abstract] | |
Financial Instruments | Note 9—Financial Instruments Fair values have been determined for measurement and/or disclosure purposes based on the following methods. The Company characterizes inputs used in determining fair value using a hierarchy that prioritizes inputs depending on the degree to which they are observable. The levels of the fair value hierarchy are as follows: • Level 1 – fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities; • Level 2 – fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and • Level 3 – fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). The carrying values of cash, receivables, payables and accrued liabilities approximate their fair values because of the short- term nature of these financial instruments. Balances due to and due from related parties have no terms and are payable on demand, thus are also considered current and short-term in nature, hence carrying value approximates fair value. The component of the Company’s long-term debt attributed to the host liability is recorded at amortized cost. Investments in debt instruments that are held to maturity are also recorded at amortized cost. The following table summarizes the fair value hierarchy for the Company’s financial assets and financial liabilities that are re-measured March 31, 2022 December 31, 2021 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Financial Assets Long term investments—other 1 $ 454 $ — $ — $ 454 $ 568 $ — $ — $ 568 Financial Liabilities Derivative liabilities $ — $ — $ 4 $ 4 $ — $ — $ 16 $ 16 (1) Long-term investments – other are included in the investments balance on the unaudited interim condensed consolidated balance sheets. There were no transfers between Level 1, Level 2, and Level 3 within the fair value hierarchy during the three months ended March 31, 2022 and 2021. The Company’s other investment as of March 31, 2022 is considered to be a Level 1 instrument because it is comprised of shares of a public company, and there is an active market for the shares and observable market data and inputs available. All Level 1 investments are comprised of equity investments which are re-measured The following table summarizes the changes in Level 1 financial assets: Financial Assets Balance as of December 31, 2021 $ 568 Revaluations on Level 1 instruments (114 ) Balance as of March 31, 2022 $ 454 The derivative liabilities related to the convertible debt instruments and freestanding warrants are recorded at fair value estimated using the Black-Scholes option pricing model and is therefore considered to be a Level 3 measurement. The following table summarizes the changes in Level 3 financial assets and liabilities: Derivative Liabilities Balance as of December 31, 2021 $ 16 Revaluations on Level 3 instruments (12 ) Balance as of March 31, 2022 $ 4 The Company’s financial and non-financial The following table summarizes the Company’s long-term debt instruments (Note 5) at their carrying value and fair value: March 31, 2022 December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value Unsecured Debentures $ 57,744 $ 67,566 $ 57,171 $ 64,596 Secured Notes 135,862 184,119 134,902 176,487 Other 1,292 1,021 1,307 1,021 Total $ 194,898 $ 252,706 $ 193,380 $ 242,104 |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Note 10 – Commitments In the ordinary course of business, the Company enters into contractual agreements with third parties that include non-cancelable The following table summarizes the Company’s contractual obligations and commitments as of March 31, 2022: For the twelve months ended March 31, 2023 2024 2025 2026 2027 Operating leases $ 7,895 $ 7,892 $ 8,065 $ 8,161 $ 7,835 Service contracts 2,705 2 — — — Long-term debt, principal (1) 168,205 12,969 68 16,987 81 Total $ 178,805 $ 20,863 $ 8,133 $ 25,148 $ 7,916 (1) The payment schedule above shows amounts payable if the conversion options are not exercised by the lender of the Company’s convertible debt instruments. The Company’s commitments include employees, consultants and advisors, as well as leases and construction contracts for offices, dispensaries and cultivation facilities in the U.S. and Canada. The Company has certain operating leases with renewal options extending the initial lease term for an additional one |
Contingencies And Guarantees
Contingencies And Guarantees | 3 Months Ended |
Mar. 31, 2022 | |
Contingencies And Guarantees [Abstract] | |
Contingencies And Guarantees | Note 11—Contingencies and Guarantees The Company is involved in lawsuits, claims, and proceedings, including those identified below, which arise in the ordinary course of business. In accordance with the Financial Accounting Standards Board ASC Topic 450 Contingencies, the Company will make a provision for a liability when it is both probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company believes it has adequate provisions for any such matters. The Company reviews these provisions in conjunction with any related provisions on assets related to the claims at least quarterly and adjusts these provisions to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other pertinent information related to the case. Should developments in any of these matters outlined below cause a change in the Company’s determination as to an unfavorable outcome and result in the need to recognize a material provision, or, should any of these matters result in a final adverse judgment or be settled for significant amounts, they could have a material adverse effect on the Company’s results of operations, cash flows, and financial position in the period or periods in which such a change in determination, settlement or judgment occurs. The Company expenses legal costs relating to its lawsuits, claims and proceedings as incurred. The Company has been named as a defendant in several legal actions and is subject to various risks and contingencies arising in the normal course of business. Based on consultation with counsel, management and legal counsel is of the opinion that the outcome of these uncertainties will not have a material adverse effect on the Company’s financial position. The events that allegedly gave rise to the following claims occurred prior to the Company’s closing of the MPX Acquisition in February 2019 are as follows: • There is a claim from a former consultant against the Company, with respect to alleged consulting fees owed by MPX to the consultant, claiming the right to receive approximately $0.5 million and punitive damages. During the year ended December 31, 2021, the former consultant updated the claim to set forth the total damages claimed, which are $5.4 million, and provided supplemental disclosures which specify total damages sought, which are $167.0 million. On December 13, 2021, the Company and former consultant reached a full and final settlement of $1.5 million. As of March 31, 2022, $0.7 million was paid and the remaining balance of $0.8 million is presented as part of the accrued and other current liabilities line on the unaudited interim condensed consolidated balance sheets; • There is a claim from two former noteholders against the Company and MPX Bioceutical ULC (“MPX ULC”) • There is a claim against the Company, MPX ULC and MPX, with respect to a prior acquisition made by MPX in relation to a subsidiary that was not acquired by the Company as part of the MPX Acquisition, claiming $3.0 million in connection with alleged contractual obligations of MPX. In addition, the Company is currently reviewing the following matters with legal counsel and has not yet determined the range of potential losses: In October 2018, Craig Roberts and Beverly Roberts (the “Roberts”) and the Gary W. Roberts Irrevocable Trust Agreement I, Gary W. Roberts Irrevocable Trust Agreement II, and Gary W. Roberts Irrevocable Trust Agreement III (the “Roberts Trust” and together with the Roberts, the “Roberts Plaintiffs”) filed two separate but similar declaratory judgment actions in the Circuit Court of Palm Beach County, Florida against GrowHealthy Holdings, LLC (“GrowHealthy Holdings”) and the Company in connection with the acquisition of substantially all of GrowHealthy Holdings’ assets by the Company in early 2018. The Roberts Plaintiffs’ sought a declaration that iAnthus must deliver certain share certificates to the Roberts without requiring them to deliver a signed Shareholder Representative Agreement to GrowHealthy Holdings, which delivery was a condition precedent to receiving the iAnthus share certificates and required by the acquisition agreements between GrowHealthy Holdings and the Company. In January 2019, the Circuit Court of Palm Beach County denied the Roberts Plaintiffs’ motion for injunctive relief, and the Roberts Plaintiffs signed and delivered the Shareholder Representative Agreement forms to GrowHealthy Holdings while reserving their rights to continue challenging the validity and enforceability of the Shareholder Representative Agreement. The Roberts Plaintiffs thereafter amended their complaints to seek monetary damages in the aggregate amount of $22.0 million plus treble damages. On May 21, 2019, the court issued an interlocutory order directing the Company to deliver the share certificates to the Roberts Plaintiffs, which the Company delivered on June 17, 2019, in accordance with the court’s order. On December 19, 2019, the Company appealed the court’s order directing delivery of the share certificates to the Florida Fourth District Court of Appeal, which appeal was denied per curiam. On October 21, 2019, the Roberts Plaintiffs were granted leave by the Circuit Court of Palm Beach County to amend their complaints in order to add purported claims for civil theft and punitive damages, and on November 22, 2019, the Company moved to dismiss the Roberts Plaintiffs’ amended complaints. On May 1, 2020, the Circuit Court of Palm Beach County heard arguments on the motions to dismiss, and on June 11, 2020, the court issued a written order granting in part and denying in part the Company’s motion to dismiss. Specifically, the order denied the Company’s motion to dismiss for lack of jurisdiction and improper venue; however, the court granted the Company’s motion to dismiss the Roberts Plaintiffs’ claims for specific performance, conversion and civil theft without prejudice. With respect to the claim for conversion and civil theft, the Circuit Court of Palm Beach County provided the Roberts Plaintiffs with leave to amend their respective complaints. On July 10, 2020, the Roberts Plaintiffs filed further amended complaints in each action against the Company including claims for conversion, breach of contract and civil theft including damages in the aggregate amount of $22.0 million plus treble damages, and on August 13, 2020, the Company filed a consolidated motion to dismiss such amended complaints. On October 26, 2020, Circuit Court of Palm Beach County heard argument on the consolidated motion to dismiss, denied the motion and entered an order to that effect on October 28, 2020. Answers on both actions were filed on November 20, 2020 and the parties have commenced discovery. On September 9, 2021, the Roberts Plaintiffs filed a motion to consolidate the two separate actions, which motion was granted on October 14, 2021. On August 6, 2020, the Roberts filed a lawsuit against Randy Maslow, the Company’s now former Interim Chief Executive Officer, President, and Director , On April 19, 2020, Hi-Med LLC (“Hi-Med”), an equity holder and one of the Lenders holding an Unsecured Debenture of the Company in the principal amount “Hi-Med Hi-Med 10b-5 Hi-Med Hi-Med “Hi-Med Hi-Med Hi-Med Hi-Med Hi-Med Hi-Med Hi-Med Hi-Med Hi-Med’s so-ordered Hi-Med’s Hi-Med’s Hi-Med’s Hi-Med’s 21 Hi-Med’s Hi-Med Hi-Med On April 20, 2020, Donald Finch, a shareholder of the Company, filed a putative class action lawsuit with the SDNY against the Company (the “Class Action Lawsuit”) and is seeking damages for an unspecified amount against the Company, its former Chief Executive Officer, its current Chief Financial Officer and others for alleged false and misleading statements regarding certain proceeds from the issuance of long-term debt, that were held in escrow to make interest payments in the event of default on such long-term debt. On May 5, 2020, Peter Cedeno, another shareholder of the Company, filed a putative class action against the same defendants alleging substantially similar causes of action. On June 16, 2020, four separate motions for consolidation, appointment as lead plaintiff, and approval of lead counsel were filed by Jose Antonio Silva, Robert and Sherri Newblatt, Robert Dankner, and Melvin Fussell. On July 9, 2020, the SDNY issued an order consolidating the Class Action Lawsuit and the Hi-Med so-ordered 21 On July 13, 2020, the Company announced the proposed Recapitalization Transaction. On September 14, 2020, at the meetings of Secured Lenders, Unsecured Lenders and the holders of the Company’s common shares, options and warrants (collectively, the “Securityholders”), the Securityholders voted in support of the Recapitalization Transaction. On October 5, 2020, the Company received final approval from the Court for the Plan of Arrangement. Completion of the Recapitalization Transaction is subject to the Company obtaining the Requisite Approvals. As such, no amounts have been accrued with respect to the Recapitalization Transaction. On January 29, 2021, the notice of appeal with respect to the final approval for the Plan of Arrangement received by the Company on November 5, 2020 was dismissed by the British Columbia Court of Appeal. On June 15, 2021, the Company and the Lenders agreed to amend the date by which the Recapitalization Transaction pursuant to the Plan of Arrangement is required to be implemented by from June 30, 2021 to August 31, 2021. On August 20, 2021, the Applicants filed the Application with the OSCJ, which sought, among other things, a declaration that the Outside Date be extended to the date on which any regulatory approval or consent condition to implementation of the Plan of Arrangement is satisfied or waived. On August 24, 2021, the Company and Applicants appeared for a case conference before the OSCJ. At this conference, the OSCJ issued a Stay Order that required the parties to the Restructuring Support Agreement to maintain the status quo until the hearing on September 23, 2021. Specifically, the Stay Order provided that the parties shall remain bound by the Restructuring Support Agreement and not take any steps to advance or impede the regulatory approval process for the closing of the Recapitalization Transaction or otherwise have any communication with the applicable state-level regulators concerning the Recapitalization Transaction or the other counterparties to the Restructuring Support Agreement. On September 23, 2021, the parties appeared before the OSCJ for a hearing on the Application. Following this hearing, the OSCJ issued an endorsement that extended the Stay Order from September 23, 2021 until 48 hours after the release of the OSCJ’s decision on the merits of the Application. On October 12, 2021, the OSCJ issued the Decision. Specifically, the OSCJ granted the declaration sought by the Applicants and ordered that the Outside Date in the Restructuring Support Agreement be extended to the date on which any regulatory approval or consent condition to implementation of the Plan of Arrangement is satisfied or waived. On November 10, 2021, the Company filed a Notice of Appeal with the Ontario Court of Appeal and a hearing on the appeal is currently scheduled for June 9, 2022. On July 23, 2020, Blue Sky Realty Corporation filed a putative class action against the Company, the Company’s former Chief Executive Officer, and the Company’s Chief Financial Officer in the OSCJ in Toronto. On September 27, 2021, the OSCJ granted leave for the plaintiff to amend its claim (“Amended Claim”). In the Amended Claim, the plaintiff seeks to certify the proposed class action on behalf of two classes. “Class A” consists of all persons, other than any executive level employee of the Company and their immediate families (“Excluded Persons”), who acquired the Company’s common shares in the secondary market on or after April 12, 2019, and who held some or all of those securities until after the close of trading on April 5, 2020. “Class B” consists of all persons, other than Excluded Persons, who acquired the Company’s common shares prior to April 12, 2019, and who held some or all of those securities until after the close of trading on April 5, 2020. Among other things, the plaintiff alleges statutory and common law misrepresentation, and seeks an unspecified amount of damages together with interest and costs. The plaintiff also alleges common law oppression for releasing certain statements allegedly containing misrepresentations inducing Class B members to hold the Company’s securities beyond April 5, 2020. No certification motion has been scheduled. The Amended Claim also changed the named plaintiff from Blue Sky Realty Corporation to Timothy Kwong. The hearing date for the motion for leave to proceed with a secondary market claim under the Securities Act (Ontario) has been vacated. During the year ended December 31, 2020, the Company filed a statement of claim against Oasis Investments II Master Fund Ltd. (“Oasis”), an Unsecured Lender, On August 19, 2021, Arvin Saloum (“Saloum”), a former consultant of the Company, filed a Demand for Arbitration with the American Arbitration Association against The Healing Center Wellness Center, Inc. (“THCWC”) and iAnthus Arizona, LLC (“iA AZ”), Maricopa County (“Arizona Superior Court”), seeking declarations that: (i) the JV Agreement is void, against public policy and terminable at will; (ii) the JV Agreement is unenforceable and not binding; and (iii) the JV Agreement only applies to sales under the Arizona Medical Marijuana Act. On January 21, 2022, Saloum filed an Answer with Counterclaims in response to the Declaratory Judgment Complaint. The Declaratory Judgment Complaint remains pending before the Arizona Superior Court. The Arbitration Action is stayed, pending resolution of the Declaratory Judgment Complaint. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 12—Related Party Transactions March 31, December 31, Financial Statement Line Item Other long-term assets — 4,552 Total $ — $ 4,552 As part of the MPX Acquisition, the Company acquired a related party receivable of $0.7 million due from a company owned by a former director and officer of the Company, Elizabeth Stavola. The related party receivable was converted into a loan facility of up to $10.0 million, which accrues interest at the rate of 16.0%, compounded annually. Interest is due upon maturity of the loan on December 31, 2021. During the year ended December 31, 2021, the Company exercised its right to convert the principal balance of the loan and accrued interest into a 99% equity interest in MPX NJ which conversion and option exercise were subject to certain regulatory approvals 100 % of On June 30, 2017, the Company entered into a loan facility with a former director and officer of the Company, Hadley Ford (“Ford”). The total loan facility was up to C$0.5 million (equivalent to $0.4 million) and accrued interest at the rate of 2.5%. Interest was due upon maturity of the loan on June 30, 2021. As part of Ford’s termination agreement, the total loan facility was offset by compensation owed to Ford of $0.5 million during the first quarter of 2021. As of March 31, 2022, the outstanding balance of the facility including accrued interest was $Nil (December 31, 2021 – $Nil). |
Unaudited Interim Condensed Con
Unaudited Interim Condensed Consolidated Statements of Cash Flows Supplemental Information | 3 Months Ended |
Mar. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Unaudited Interim Condensed Consolidated Statements of Cash Flows Supplemental Information | Note 13 – Unaudited Interim Condensed Consolidated Statements of Cash Flows Supplemental Information (a) Cash payments made on account of: For the Three Months Ended March 31, 2022 2021 Income taxes $ 98 $ 657 Interest 23 24 (b) Changes in other non-cash For the Three Months Ended March 31, 2022 2021 Decrease (increase) in: Accounts receivables $ (81) $ (1,009 ) Prepaid expenses (1,809 ) (1,028 ) Inventories (3,258 ) (723 ) Other current assets 201 (1,374 ) Other long-term assets (13 ) 647 Operating leases (313 ) (203 ) Increase in: Accounts payable 3,561 1,599 Accrued and other current liabilities 6,359 6,883 $ 4,647 $ 4,792 (c) Depreciation and amortization are comprised of the following: For the Three Months Ended March 31, 2022 2021 Property, plant and equipment $ 4,396 $ 2,977 Operating lease right-of-use 623 542 Intangible assets 4,010 3,855 $ 9,029 $ 7,374 (d) Write-downs and other charges are comprised of the following: For the Three Months Ended March 31, 2022 2021 Write-downs : Account receivable recoveries $ (12 ) $ — Operating lease right-of-use — 259 Property, plant and equipment 69 — $ 57 $ 259 (e) Significant non-cash For the Three Months Ended March 31, 2022 2021 Supplemental Cash Flow Information: Non-cash paid-in-kind 767 554 Non-cash consideration for asset acquisition 19,193 — Cash and Restricted Cash For purposes of the unaudited interim condensed consolidated balance sheets and the statements of cash flows, cash and restricted cash are held primarily in U.S. dollars. Restricted cash balances are those which meet the definition of cash and cash equivalents but are not available for use by the Company. As of March 31, 2022, the Company held $2.6 million as restricted cash (December 31, 2021—$3.3 million), which is mainly related to funds held in escrow from the Senior Secured Bridge Notes. The net proceeds from the Senior Secured Bridge Notes were placed in escrow, and the availability of the funds is subject to drawdown requests that must be approved by the Secured Lenders. The following table provides a reconciliation of cash and restricted cash reported on the unaudited interim condensed consolidated balance sheets to such amounts presented in the statements of cash flows: March 31, December 31, 2021 Cash $ 14,078 $ 13,244 Restricted cash 2,641 3,334 Total cash and restricted cash presented in the statements of cash flows $ 16,719 $ 16,578 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14—Subsequent Events Legal Proceedings Please refer to Note 11 for further discussion. Event of Default and Financial Restructuring The Company is currently in default of the obligations under the Company’s long-term debt as discussed in Note 1. As part of the Restructuring Support Agreement with the Secured Lenders and a majority of the Unsecured Lenders, dated July 10, 2020, the Secured Lenders, the Unsecured Lenders and the existing holders of the Company’s common shares at the closing of the Recapitalization Transaction (“Existing Shareholders”) are to be allocated and issued, approximately, the amounts of Restructured Senior Debt (as defined below), Interim Financing (as defined below), 8% Senior Unsecured Debentures (as defined below) and percentage of the pro forma common equity, as presented in the following table: (in ’000s of U.S. dollars) Restructured 1 Interim Financing 2 8% Senior 3 Pro Forma 4 Secured Lenders $ 85,000 $ 14,737 $ 5,000 48.625 % Unsecured Lenders — — 15,000 48.625 % Existing Shareholders — — — 2.75 % Total $ 85,000 $ 14,737 $ 20,000 100 % (1) The principal balance of the Secured Notes will be reduced to $85.0 million, which will be increased by the amount of the Interim Financing, which has a first lien, senior secured position over all of the Company’s assets, is non-convertible non-callable (2) The Secured Lenders provided $14.7 million of interim financing (“Interim Financing”) to iAnthus Capital Management, LLC (“ICM”) on substantially the same terms as the Restructured Senior Debt, net of a 5% original issue discount. The amounts of the Interim Financing along with any accrued interest thereon is expected to be converted into, and the original principal balance will be added to, the Restructured Senior Debt upon consummation of the Recapitalization Transaction. (3) The senior unsecured de bentures non-callable (the “8% Senior Unsecured Debentures”). (4) On January 6, 2022, the Company’s the Company its Upon consummation of the Recapitalization Transaction, a new board of directors (the “New Board”) will be composed of the following members: (i) three nominees will be designated by the Secured Lenders; (ii) three nominees will be designated by the Consenting Unsecured Lenders; and (iii) one nominee will be designated by the director nominees of the Secured Lenders and Consenting Unsecured Lenders to serve as a member of the Company’s New Board and the Company’s Chief Executive Officer. Pursuant to the terms of the proposed Recapitalization Transaction, the Collateral Agent, the Secured Lenders and the Consenting Unsecured Lenders agreed to forbear from further exercising any rights or remedies in connection with any events of default that now exist or may in the future arise under any of the purchase agreements with respect of the Secured Notes and all other agreements delivered in connection therewith, the purchase agreements with respect of the Unsecured Lenders and all other agreements delivered in connection therewith and any other agreement to which the Collateral Agent, Secured Lenders, or Consenting Unsecured Lenders are a party to (collectively, the “Defaults”) and shall take such steps as are necessary to stop any ongoing enforcement efforts in relation thereto. Upon consummation of the Recapitalization Transaction, the Collateral Agent, Secured Lenders and Consenting Unsecured Lenders are also expected to irrevocably waive all Defaults and take all steps required to withdraw, revoke and/or terminate any enforcement efforts in relation thereto. State-level regulatory approvals remain outstanding in Massachusetts, New Jersey and New York. On January 7, 2022, the New Jersey CRC approved the Company’s acquisition Completion of the Recapitalization Transaction is subject to receipt of the Requisite Approvals. If the Requisite Approvals are obtained, the Plan of Arrangement will bind all Secured Lenders, Unsecured Lenders and Existing Shareholders. The Plan of Arrangement was approved by the Court on October 5, 2020. On January 29, 2021, a notice of appeal with respect to the final approval for the Plan of Arrangement received by the Company on November 5, 2020 was dismissed by the British Columbia Court of Appeal. The Company is in progress of obtaining the remaining Requisite Approvals. Specifically, certain of the transactions contemplated by the Recapitalization Transaction have triggered the requirement for an approval by state-level regulators in certain U.S. states with jurisdiction over the licensed cannabis operations of entities owned, in whole or in part, or controlled, directly or indirectly, by the Company in such states. On February 23, 2021, the Nevada Cannabis Compliance Board approved the proposed change of ownership and control of the Company’s wholly-owned subsidiary, GMNV, contemplated by the Recapitalization Transaction. On June 17, 2021, the CCC issued the June 17 Approval. On June 15, 2021, the Company and the Lenders agreed to amend the Outside Date by which the Recapitalization Transaction pursuant to the Plan of Arrangement is required to be implemented by from June 30, 2021 to August 31, 2021. On August 12, 2021, Mayflower’s pending application for its Allston Retail License was approved by the CCC at its August, 2021 public meeting. As a result of this August 12, 2021 approval, Mayflower was required to submit the New COC Application, which was submitted on November 10, 2021 and is currently pending before the CCC. The New COC Application must be approved by the CCC before the June 17 Approval can be effectuated. On August 20, 2021, the Vermont DPS confirmed that it does not require prior approval of the Recapitalization Transaction, except for background checks of the prospective new directors and Interim Chief Executive Officer of the Company to be appointed upon the closing of the Recapitalization Transaction, which background checks have been completed. On October 29, 2021, the OMMU approved the proposed change of ownership and control of the Company’s wholly-owned subsidiary, McCrory’s, contemplated by the Recapitalization Transaction. On November 19, 2021, the Petition was filed by the Petitioners with the OMMU challenging the OMMU’s approval of the Variance Request and requesting a formal administrative hearing before an ALJ at the Florida Division of Administrative Hearings. As a result of the Petition, the OMMU informed the Company that the OMMU’s prior approval of the Variance Request is not an enforceable agency order until such time that there is a final resolution of the Petition and a final agency order is issued by the OMMU. On May 4, 2022, the OMMU issued a final agency order, accepting the recommendation of the ALJ and dismissing the Petition. On August 20, 2021, the Applicants filed the Application with the OSCJ, which sought, among other things, a declaration that the Outside Date be extended to the date on which any regulatory approval or consent condition to implementation of the Plan of Arrangement is satisfied or waived. On October 12, 2021, the OSCJ issued his decision granting the Applicant’s relief sought in the Decision. Specifically, the OSCJ granted the declaration sought by the Applicants and ordered that the Outside Date in the Restructuring Support Agreement be extended to the date on which any regulatory approval or consent condition to implementation of the Plan of Arrangement is satisfied or waived. On November 10, 2021, the Company filed a Notice of Appeal with the Ontario Court of Appeal and a hearing on the appeal is currently scheduled for June 9, 2022. See Note 11 for further discussion. On April 1, 2022, the MMCC approved the proposed change of ownership and control of the Company’s wholly-owned subsidiary, S8, contemplated by the Recapitalization Transaction. S8 currently controls 4 licensed entities in Maryland through management services agreements. For Resignation of Interim Chief Executive Officer Effective as of May 6, 2022 (the “Resignation Date”), Randy Maslow, the Company’s Interim Chief Executive Officer and President and a member of the Board of Directors, resigned from his executive positions with the Company, including all positions with the Company’s subsidiaries and its affiliates, and from the Company’s Board of Directors and committees. In connection with the resignation, Mr. Maslow and the Company executed a separation agreement (the “Separation Agreement”), pursuant to which, Mr. Maslow will receive certain compensation and benefits valued to substantially equal the value of entitlements he would have received under Section 4(g) of his Employment Agreement. Specifically, Mr. Maslow will receive total cash compensation in the amount of approximately million (the “Separation Payment”), of which approximately million was paid out on May 6, 2022 (made up, in part of a portion of severance payment of approximately $4.8 million, and unpaid 2021 bonus of $300,000). The remainder of the Separation Payment will be paid out in equal installments of approximately $0.9 million per month over the next eight months following the Resignation Date, which shall be accelerated upon the closing of the Recapitalization Transaction, a Material Financing or in the event of a Board Change, as such terms are described in the Separation Agreement. In addition, the Company shall pay the monthly premium for Mr. Maslow’s continued participation in the Company’s health and dental insurance benefits pursuant to COBRA for one year from May 6, 2022. Furthermore, Mr. Maslow’s compensation and benefits includes, among other items, an extension of exercise period of options to acquire the Company’s common shares which were held by Mr. Maslow until the earlier of (i) five years from the Resignation Date; (ii) the original expiration dates of the applicable option; or (iii) the closing of the Recapitalization Transaction. Finally, under the Separation Agreement, Mr. Maslow agreed to relinquish all entitlements to his right to receive a grant of restricted stock units under the long-term incentive plan that was announced on January 7, 2022, the issuance of which was contingent on the closing of the Recapitalization Transaction. Mr. Maslow will continue to serve the Company in a consulting role for a period of six months following the Resignation Date (provided that such period may be extended by additional six months by the Company) at a base compensation of $25,000 per month. Under the Separation Agreement, it was agreed that Mr. Maslow’s non-competition covenant will expire upon termination of the consulting term. In consideration for receipt of these compensation and benefits, Mr. Maslow provided a release to the Company (and the Company provided a release to Mr. Maslow), agreed to provide certain cooperation to the Company, agreed to a certain confidentiality and return of property covenants, to mutual non-disparagement covenants and to negotiate in good faith a potential extension of Mr. Maslow’s non-competition covenants. Appointment of Interim Chief Executive Officer The Board appointed Robert Galvin as the Company’s Interim Chief Executive Officer and a member of the Board, effective May 6, 2022. Mr. Galvin has served as the Company’s Interim Chief Operating Officer since November 2020. In addition, since February 2019, Mr. Galvin has served as an operations and administrative advisor to the Company. From February 2019 to December 2019, Mr. Galvin also served as a member of the Board. Prior to the Company, Mr. Galvin served as a member of the board of directors and as audit committee chair of MPX Bioceutical Corporation (“MPX”) from November 2017 until the MPX Acquisition. Mr. Galvin will serve as Interim Chief Executive Officer of the Company pursuant to his employment agreement dated October 12, 2019 and effective as of January 1, 2019, as subsequently amended on April 4, 2020. |
Organization and Description _2
Organization and Description of Business (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Description of Business | (a) Description of Business iAnthus Capital Holdings, Inc. (“ICH”, or “iAnthus”), together with its consolidated subsidiaries (the “Company”) was incorporated under the laws of British Columbia, Canada, on November 15, 2013. The Company is a vertically-integrated multi-state owner and operator of licensed cannabis cultivation, processing and dispensary facilities, and developer, producer and distributor of innovative branded cannabis and cannabidiol (“CBD”) products in the United States. Through the Company’s subsidiaries, licenses, interests and contractual arrangements, the Company has the capacity to operate dispensaries and cultivation/processing facilities, and manufacture and distribute cannabis across the states in which the Company operates in the U.S. Additionally, the Company distributes CBD products online and to retail locations across the United States. The Company’s business activities, and the business activities of its subsidiaries, which operate in jurisdictions where the use of marijuana has been legalized under state and local laws, currently are illegal under U.S. federal law. The U.S. Controlled Substances Act classifies marijuana as a Schedule I controlled substance. Any proceeding that may be brought against the Company could have a material adverse effect on the Company’s business plans, financial condition and results of operations. |
Basis of Presentation | (b) Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements (the “financial statements”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and, therefore, certain information, footnotes and disclosures normally included in the annual financial statements, prepared in accordance with U.S. GAAP, have been condensed or omitted in accordance with SEC rules and regulations. The financial data presented herein should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2021, included in the Company’s Annual Report on the Form 10-K The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the entire year ending December 31, 2022, or any other period. Except as otherwise stated, these unaudited interim condensed consolidated financial statements are presented in U.S. dollars. |
Going Concern | (c) Going Concern These unaudited interim condensed consolidated financial statements have been prepared under the assumption that the Company will be able to continue its operations and will be able to realize its assets and discharge its liabilities in the normal course of business in the foreseeable future. For the three months ended March 31, 2022, the Company reported a net loss of $10.1 million, operating cash inflows of $1.8 million and an accumulated deficit of $811.7 million as of March 31, 2022. These material circumstances cast substantial doubt on the Company’s ability to continue as a going concern for a period at least 12 months from the date of this report and ultimately on the appropriateness of the use of the accounting principles applicable to a going concern. During the three months ended March 31, 2022, due to liquidity constraints, the Company did not make interest payments due to the lenders (the “Secured Lenders”) of the Company’s senior secured convertible debentures (the “Secured Notes”) and the lenders (the “Unsecured Lenders” and together with the Secured Lenders, the “Lenders”) of the Company’s 8% convertible unsecured debentures (the “Unsecured Debentures”). The Company is currently in default with respect to certain of its long-term debt, which, as of March 31, 2022, consists of As a result of the March 31, 2020 default, the Board of Directors of the Company (the “Board” or the “Board of Directors”) formed a special committee comprised of the Company’s then five independent, non-management COVID-19 (“COVID-19”), • renegotiation of existing financing arrangements and other material contracts, including any amendments, waivers, extensions or similar agreements with the Lenders and/or stakeholders of the Company and/or its subsidiaries that the Special Committee determines are in the best interest of the Company and/or its subsidiaries; • managing available sources of capital, including equity investments or debt financing or refinancing and the terms thereof; • implementing the operational and financial restructuring of the Company and its subsidiaries and their respective businesses, assets and licensure and other rights; and • implementing other potential strategic transactions. The Special Committee engaged Canaccord Genuity Corp. as its financial advisor to assist the Special Committee in analyzing various strategic alternatives to address its capital structure and liquidity challenges. On June 22, 2020, the Company received notice from Gotham Green Admin 1, LLC (the “Collateral Agent”), as collateral agent holding security for the benefit of the Secured Lenders, with a demand for repayment (the “Demand Letter”) under the Amended and Restated Secured Debenture Purchase Agreement dated October 10, 2019 (the “Secured Notes Purchase Agreement”) of the entire principal amount of the Secured Notes, together with interest, fees, costs and other allowable charges that had accrued or might accrue in accordance with the Secured Notes Purchase Agreement and the other Transaction Agreements (as defined in the Secured Notes Purchase Agreement). The Collateral Agent also concurrently provided the Company with a Notice of Intention to Enforce Security (the “BIA Notice”) under section 244 of the Bankruptcy and Insolvency Act (Canada) (the “BIA”). On July 10, 2020, the Company and certain of its subsidiaries entered into a restructuring support agreement (as amended, the “Restructuring Support Agreement”) with the Secured Lenders and certain of the Unsecured Lenders (the “Consenting Unsecured Lenders”) to affect a proposed recapitalization transaction (the “Recapitalization Transaction”). Under the Restructuring Support Agreement, certain of the Secured Lenders agreed to provide interim financing in the amount of $14.7 million (the “Tranche Four Secured Notes”). Refer Note 14 for further details regarding the proposed transaction. Subject to compliance with the Restructuring Support Agreement, the Secured Lenders and the Consenting Unsecured Lenders will forbear from further exercising any rights or remedies in connection with any events of default of the Company occurring under their respective agreements and will stop any current or pending enforcement actions with respect to the same, including as set forth in the Demand Letter. Pursuant to the terms of the Restructuring Support Agreement, the Recapitalization Transaction would be implemented pursuant to arrangement proceedings (“Arrangement Proceedings”) commenced under the British Columbia Business Corporations Act, or, only if necessary, the Companies’ Creditors Arrangement Act (Canada) (“CCAA”). Completion of the Recapitalization Transaction through the Arrangement Proceedings is subject to, among other things, requisite stakeholder approval of the plan of arrangement (the “Plan of Arrangement”). On September 14, 2020, the Company held meetings at which the stakeholders approved the Plan of Arrangement. Following the stakeholder vote, on September 25, 2020, the Company attended a court hearing before the Supreme Court of British Columbia (the “Court”) to receive approval of the Plan of Arrangement. On October 5, 2020, the Company received final approval from the Court for the Plan of Arrangement. On November 5, 2020, the Company received a notice of appeal with respect to the final approval for the Plan of Arrangement by the Court, and on January 29, 2021, the appeal was dismissed by the British Columbia Court of Appeal. Because the Company received the necessary approvals of the Plan of Arrangement from the Court, Secured Lenders, Unsecured Lenders and the holders of the Company’s common shares, options and warrants, the Recapitalization Transaction will be implemented through the British Columbia Business Corporations Act and not the CCAA. The Company may be required to obtain other necessary approvals with respect to the Plan of Arrangement, including approvals by state-level regulators and the Canadian Securities Exchange (collectively, the “Requisite Approvals”). Specifically, certain of the transactions contemplated by the Recapitalization Transaction have triggered the requirement for an approval by state-level regulators in certain U.S. states with jurisdiction over the licensed cannabis operations of entities owned, in whole or in part, or controlled, directly or indirectly, by the Company in such states. On February 23, 2021, the Nevada Cannabis Compliance Board approved the proposed change of ownership and control of the Company’s wholly-owned subsidiary, GreenMart of Nevada NLV, LLC (“GMNV”), contemplated by the Recapitalization Transaction. On June 17, 2021, the Massachusetts Cannabis Control Commission (the “CCC”) approved the proposed change of ownership and control of the current licenses held by the Company’s wholly-owned subsidiaries, Mayflower Medicinals, Inc. (“Mayflower”) and Cannatech Medicinals, Inc. (“Cannatech”), contemplated by the Recapitalization Transaction (the “June 17 Approval”). On June 15, 2021, the Company and the Lenders agreed to amend the date by which the Recapitalization Transaction pursuant to the Plan of Arrangement is required to be implemented by from June 30, 2021 to August 31, 2021 (the “Outside Date”). On August 12, 2021, Mayflower’s pending application for a Marijuana Establishment retail license for its Allston, Massachusetts retail location (the “Allston Retail License”) was approved by the CCC at its August 2021 public meeting. As a result of such August 12, 2021 approval, Mayflower was required to submit a new change of ownership and control application to the CCC in connection with the Recapitalization Transaction with respect to the Allston Retail License (the “New COC Application”). The New COC Application was submitted by Mayflower on November 10, 2021 and is currently pending before the CCC. The New COC Application must be approved by the CCC before the June 17 Approval can be effectuated. On August 20, 2021, Gotham Green Partners, LLC and Gotham Green Admin 1, LLC (the “Applicants”) filed a Notice of Application (the “Application”) with the Ontario Superior Court of Justice Commercial List (“OSCJ”), which sought, among other things, a declaration that the Outside Date be extended to the date on which any regulatory approval or consent condition to implementation of the Plan of Arrangement is satisfied or waived. On August 24, 2021, the Company and Applicants appeared for a case conference before the OSCJ at which the OSCJ issued an endorsement (the “Stay Order”) that required the parties to the Restructuring Support Agreement to maintain the status quo until the hearing on September 23, 2021. Specifically, the Stay Order provided that the parties shall remain bound by the Restructuring Support Agreement and not take any steps to advance or impede the regulatory approval process for the closing of the Recapitalization Transaction or otherwise have any communication with the applicable state-level regulators concerning the Recapitalization Transaction or the other counterparties to the Restructuring Support Agreement. On September 23, 2021, the parties appeared before the OSCJ for a hearing on the Application. Following this hearing, the OSCJ issued an endorsement that extended the Stay Order from September 23, 2021 until 48 hours after the release of the OSCJ’s decision on the merits of the Application. On October 12, 2021, the OSCJ issued its decision granting the Applicant’s relief sought in the Application (the “Decision”). Specifically, the OSCJ granted the declaration sought by the Applicants and ordered that the Outside Date be extended to the date on which any regulatory approval or consent condition to implementation of the Plan of Arrangement is satisfied or waived. On November 10, 2021, the Company filed a Notice of Appeal with the Ontario Court of Appeal and a hearing on the appeal is scheduled for June 9, 2022. On August 20, 2021, the Vermont Department of Public Safety (the “DPS”) confirmed that the DPS does not require prior approval of the Recapitalization Transaction, except for background checks of the prospective new directors and Interim Chief Executive Officer of the Company to be appointed upon the closing of the Recapitalization Transaction, which background checks have been completed. On October 29, 2021, the Florida Department of Health, Office of Medical Marijuana Use (the “OMMU”) approved the proposed change of ownership and control of the Company’s wholly-owned subsidiary, McCrory’s Sunny Hill Nursery, LLC (“McCrory’s”) contemplated by the Recapitalization Transaction (the “Variance Request”). On November 19, 2021, a petition (as amended, the “Petition”) was filed by certain petitioners (the “Petitioners”) with the OMMU challenging the OMMU’s approval of the Variance Request and requesting a formal administrative hearing before an administrative law judge (“ALJ”) at the Florida Division of Administrative Hearings. As a result of the Petition, the OMMU informed the Company that the OMMU’s prior approval of the Variance Request is not an enforceable agency order until such time that there is a final resolution of the Petition and a final agency order is issued by the OMMU. On May 4, 2022, the OMMU issued a final agency order, accepting the recommendation of the ALJ and dismissing the Petition. On April 1, 2022, the Maryland Medical Cannabis Commission (the “MMCC”) approved the proposed change of ownership and control of the Company’s wholly-owned subsidiary, S8 Management, LLC (“S8”), contemplated by the Recapitalization Transaction. S8 currently controls State-level regulatory approvals remain outstanding in Massachusetts, New Jersey, and New York. On January 7, 2022, the New Jersey Cannabis Regulatory Commission (“CRC”) approved the Company’s acquisition The Company believes that the financing transactions received to date should provide the necessary funding for the Company to continue as a going concern. However, there can be no assurance that capital, when needed, will be available on terms acceptable to the Company, or at all. As such, these material circumstances cast substantial doubt on the Company’s ability to continue as a going concern for a period no less than 12 months from the date of this report. These unaudited interim condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Basis of Consolidation | (d) Basis of Consolidation The unaudited interim condensed consolidated financial statements include the accounts of the Company together with its consolidated subsidiaries, except for subsidiaries which the Company has identified as variable interest entities where the Company is not the primary beneficiary. |
Use of Estimates | (e) Use of Estimates The preparation of the unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgements that affect the application of accounting policies and the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of unaudited interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations regarding future events that are believed to be reasonable under the circumstances. Actual results may differ significantly from these estimates. Significant estimates made by management include, but are not limited to: economic lives of leased assets; inputs used in the valuation of inventory; allowances for potential uncollectability of accounts and notes receivable; provisions for inventory obsolescence; impairment assessment of long- lived assets; depreciable lives of property, plant and equipment; useful lives of intangible assets; accruals for contingencies including tax contingencies; valuation allowances for deferred income tax assets; estimates of fair value of identifiable assets and liabilities acquired in business combinations; estimates of fair value of derivative instruments; and estimates of the fair value of stock-based payment awards. |
Change in Estimates | (f) Change in Estimates In January 2021, the Company completed an assessment of the yield per gram that is used as an input to value the Company’s inventory. The timing of this review was based on a combination of factors accumulating over time that provided the Company with updated information to make a better estimate on the yield of its products. These factors included enhanced data gathering of crop production and yields into inventory. The assessment resulted in a revision of the Company’s production yield estimates that are used to value ending inventory. The effect of this change was an increase in costs and expenses applicable to revenues of approximately $2.9 million in the first quarter of 2021. |
Coronavirus Pandemic | (g) Coronavirus Pandemic In March 2020, the World Health Organization declared the global emergence of the COVID-19 COVID-19. Any such alterations or modifications could cause substantial interruption to the Company’s business and could have a material adverse effect on the Company’s business, operating results, financial condition, and the trading price of the Company’s common shares, and could include temporary closures of one or more of the Company’s facilities; temporary or long-term labor shortages; temporary or long-term adverse impacts on the Company’s supply chain and distribution channels; and the potential of increased network vulnerability and risk of data loss resulting from increased use of remote access and removal of data from the Company’s facilities. In addition, COVID-19 It is unknown whether and how the Company may be impacted if the COVID-19 COVID-19 Although, the Company has been deemed essential and/or has been permitted to continue operating its facilities in the states in which it cultivates, processes, manufactures, and sells cannabis during the pendency of the COVID-19 adult-use |
Reclassification | (h) Reclassification Certain prior year amounts have been reclassified to conform with the current year’s presentation. These reclassifications adjustment had no effect on the Company’s previously reported unaudited interim condensed consolidated statement of operations. The following table summarizes the effects of reclassification adjustment on the line items within the Company’s unaudited interim condensed consolidated statements of operations: Prior Year’s Line item Reclassified Amount Current Year’s Line item Depreciation and amortization $ 542 Selling, general and administrative expenses Depreciation and amortization (542 ) Depreciation and amortization |
Revision of Prior Period Financial Statements | (i) Revision of Prior Period Financial Statements During the three months ended March 31, 2022, the Company determined that it had not appropriately recorded cost of inventory as of December 31, 2021. This resulted in an overstatement of the inventory balance, accrued and other current liabilities, income tax expense and accumulated deficit as of December 31, 2021, and an understatement of costs and expenses applicable to revenues for the year ended December 31, 2021. Based on an analysis of Accounting Standards Codification (“ASC”) 250 – “Accounting Changes and Error Corrections” (“ASC 250”), Staff Accounting Bulletin 99 – “Materiality” (“SAB 99”) and Staff Accounting Bulletin 108 – “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”), the Company determined that these errors were immaterial to the previously issued financial statements, and as such no restatement was necessary. Correcting prior period financial statements for immaterial errors would not require previously filed reports to be amended. The effect of the adjustments on the line items within the Company’s consolidated balance sheet as of December 31, 2021 is as follows: December 31, 2021 As Adjustment As adjusted Inventories $ 30,447 $ (1,755 ) $ 28,692 Current assets 55,401 (1,755 ) 53,646 Total assets 346,744 (1,755 ) 344,989 Accrued and other current liabilities 99,446 (513 ) 98,933 Current liabilities 285,821 (513 ) 285,308 Total liabilities 369,141 (513 ) 368,628 Accumulated deficit (800,390 ) (1,242 ) (801,632 ) Total shareholders’ deficit (22,397 ) (1,242 ) (23,639 ) Total liabilities and shareholders’ deficit 346,744 (1,755 ) 344,989 The effect of the adjustments on the line items within the Company’s consolidated statement of operations as of December 31, 2021 is as follows: Year Ended December 31, 2021 As Adjustment As adjusted Costs and expenses applicable to revenues $ (91,735 ) $ (1,755 ) $ (93,490 ) Gross profit 111,283 (1,755 ) 109,528 Loss from operations (22,025 ) (1,755 ) (23,780 ) Loss from operations before income tax (53,999 ) (1,755 ) (55,754 ) Income tax expense 22,249 (513 ) 21,736 Net loss (76,248 ) (1,242 ) (77,490 ) Earnings per share (0.44 ) (0.01 ) (0.45 ) The effect of the adjustments on the line items within the Company’s interim condensed consolidated statements of changes in shareholders’ deficit for the three months ended March 31, 2022 is as follows: March 31, 2022 As Adjustment As adjusted Accumulated deficit – Balance January 1, 2022 $ (800,390 ) $ (1,242 ) $ (801,632 ) Total Shareholders’ deficit – Balance January 1, 2022 (22,397 ) (1,242 ) (23,639 ) |
Organization and Description _3
Organization and Description of Business (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Effects Of Reclassification Adjustment On The Line Items Of Consolidated Statements Of Operations | The following table summarizes the effects of reclassification adjustment on the line items within the Company’s unaudited interim condensed consolidated statements of operations: Prior Year’s Line item Reclassified Amount Current Year’s Line item Depreciation and amortization $ 542 Selling, general and administrative expenses Depreciation and amortization (542 ) Depreciation and amortization |
Summary of Effects Of the Adjustment On The Line items Within Consolidated Financial Statements | The effect of the adjustments on the line items within the Company’s consolidated balance sheet as of December 31, 2021 is as follows: December 31, 2021 As Adjustment As adjusted Inventories $ 30,447 $ (1,755 ) $ 28,692 Current assets 55,401 (1,755 ) 53,646 Total assets 346,744 (1,755 ) 344,989 Accrued and other current liabilities 99,446 (513 ) 98,933 Current liabilities 285,821 (513 ) 285,308 Total liabilities 369,141 (513 ) 368,628 Accumulated deficit (800,390 ) (1,242 ) (801,632 ) Total shareholders’ deficit (22,397 ) (1,242 ) (23,639 ) Total liabilities and shareholders’ deficit 346,744 (1,755 ) 344,989 The effect of the adjustments on the line items within the Company’s consolidated statement of operations as of December 31, 2021 is as follows: Year Ended December 31, 2021 As Adjustment As adjusted Costs and expenses applicable to revenues $ (91,735 ) $ (1,755 ) $ (93,490 ) Gross profit 111,283 (1,755 ) 109,528 Loss from operations (22,025 ) (1,755 ) (23,780 ) Loss from operations before income tax (53,999 ) (1,755 ) (55,754 ) Income tax expense 22,249 (513 ) 21,736 Net loss (76,248 ) (1,242 ) (77,490 ) Earnings per share (0.44 ) (0.01 ) (0.45 ) The effect of the adjustments on the line items within the Company’s interim condensed consolidated statements of changes in shareholders’ deficit for the three months ended March 31, 2022 is as follows: March 31, 2022 As Adjustment As adjusted Accumulated deficit – Balance January 1, 2022 $ (800,390 ) $ (1,242 ) $ (801,632 ) Total Shareholders’ deficit – Balance January 1, 2022 (22,397 ) (1,242 ) (23,639 ) |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Summary of Maturities of Lease Liabilities for Operating Leases | Maturities of lease liabilities for operating leases as of March 31, 2022, were as follows: Operating 2023 $ 7,895 2024 7,892 2025 8,065 2026 8,161 2027 7,835 Thereafter 58,473 Total lease payments $ 98,321 Less: interest expense (60,961 ) Present value of lease liabilities $ 37,360 Weighted-average remaining lease term (years) 11.4 Weighted-average discount rate 20 % |
Summary of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases are as follows: Balance Sheet Information Classification March 31, December 31, Right-of-use Operating leases $ 32,529 $ 30,429 Lease Liabilities Current portion of lease liabilities Operating leases $ 7,895 $ 7,342 Long-term lease liabilities Operating leases 29,465 27,814 Total $ 37,360 $ 35,156 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Summary of inventories | Inventories are March 31, December 31, (Revised) Supplies $ 6,744 $ 6,188 Raw materials 8,059 5,641 Work in process 8,444 9,464 Finished goods 8,703 7,399 Total $ 31,950 $ 28,692 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
Summary of Business Acquisitions Allocation of the purchase price | The following table summarizes the allocation of the purchase price to the fair values assigned to the assets acquired and liabilities assumed: Consideration Cash $ 1 Settlement of pre-existing 19,193 Fair value of consideration $ 19,194 Assets acquired and liabilities assumed Cash $ 5 Fixed assets 100 Other non-current 15 Intangible assets 19,100 Accounts payable (15 ) Accrued and other current liabilities (11 ) Net assets acquired $ 19,194 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt Instruments | Secured Notes (1) May 2019 March 2019 Other Total As of January 1, 2022 $ 134,902 $ 24,033 $ 33,138 $ 1,307 $ 193,380 Fair value of financial liabilities issued 767 — — — 767 Accretion of balance 193 200 373 — 766 Repayment — — — (15 ) (15 ) As of March 31, 2022 $ 135,862 $ 24,233 $ 33,511 $ 1,292 $ 194,898 (1) This amount includes the Company’s obligation to pay an exit fee of $10.0 million that accrues interest at a rate of 13% per annum (the “Exit Fee”) under the Secured Notes. |
Share Capital (Tables)
Share Capital (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Summary Of Warrants Activity | The following table summarizes certain information in respect of the Company’s warrants: March 31, 2022 Units Weighted Average Exercise Warrants outstanding, beginning 22,640 $ 3.56 Granted — — Exercised — — Expired (4,685 ) 7.53 Warrants outstanding, ending 17,955 $ 2.49 |
Summary Of Assumptions Used To Record Fair Value of Warrants | As of March 31, 2022 and December 31, 2021, warrants classified as derivative liabilities on the unaudited interim condensed consolidated balance sheets were revalued with the following inputs: March 31, 2022 December 31, 2021 Risk-free interest rate 0.9 % 0.9 % Expected dividend yield 0.0 % 0.0 % Expected volatility 124.0 -137.1 % 93.7 -297.1 % Expected life 0.9 years 0.9 years |
Schedule Of Warrants Outstanding | Full share equivalent warrants outstanding and exercisable are as follows: March 31, 2022 December 31, 2021 Year of expiration Number Weighted Average Number Weighted Average 2022 16,170 2.26 20,855 3.47 2023 1,785 4.57 1,785 4.57 Warrants outstanding 17,955 $ 2.49 22,640 $ 3.56 |
Summary Of Potentially Dilutive Securities | The following table summarizes potentially dilutive securities, and the resulting common share equivalents outstanding as of March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 Common share options 9,620 10,504 Warrants 17,955 22,640 Secured notes 46,458 46,458 Debentures 10,135 10,135 MPX dilutive instruments (1) 408 408 Total 84,576 90,145 |
Summary Of Option Activity | The following table summarizes certain information in respect of option activity under the Company’s stock option plan: March 31, 2022 December 31, 2021 Units Weighted Weighted Units Weighted Weighted Options outstanding, beginning 10,504 $ 4.95 — 11,510 $ 4.86 — Granted — — — — — — Exercised — — — — — — Forfeited/Expired (884 ) 4.79 — (1,006 ) 3.96 — Options outstanding, ending 9,620 $ 4.96 5.97 10,504 $ 4.95 6.24 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
summary of income tax expense and effective tax rates | The following table summarizes the Company’s income tax expense and effective tax rates for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 Loss before income taxes $ (5,227 ) $ (12,161 ) Income tax expense 4,875 7,291 Effective tax rate (93.3 )% (60.0 )% |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Summary of Reportable Segments | The below table presents revenues by segment for the three months ended March 31, 2022 and 2021: Reportable Segments Three Months Ended March 31, 2022 2021 Revenues Eastern Region $ 24,785 $ 33,056 Western Region 17,716 18,302 Other (1) 289 447 Total $ 42,790 $ 51,805 Gross profit (loss) Eastern Region $ 16,068 $ 21,162 Western Region 6,411 8,580 Other 13 (21 ) Total $ 22,492 $ 29,721 Depreciation and amortization Eastern Region $ 5,259 $ 5,876 Western Region 3,012 757 Other 135 199 Total $ 8,406 $ 6,832 Write-downs, (recoveries) and other charges, net Eastern Region $ 69 $ 259 Western Region — — Other (12 ) — Total $ 57 $ 259 Net income (loss) Eastern Region $ 7,328 $ 2,916 Western Region (913 ) 335 Other (16,517 ) (22,703 ) Total $ (10,102 ) $ (19,452 ) Purchase of property, plant and equipment Eastern Region $ 1,220 $ 4,745 Western Region 351 3 Other 2 4 Total $ 1,573 $ 4,752 Purchase of intangibles Eastern Region $ — $ — Western Region — — Other 61 — Total $ 61 $ — (1) Revenues from segments below the quantitative thresholds are attributable to an operating segment of the Company that includes revenue from the sale of CBD products throughout the United States. This segment has never met any of the quantitative thresholds for determining reportable segments nor does it meet the qualitative criteria for aggregation with the Company’s reportable segments. March 31, December 31, 2022 2021 (Revised) Assets Eastern Region $ 240,291 $ 222,350 Western Region 103,441 106,485 Other 15,963 16,154 Total $ 359,695 $ 344,989 |
Summary of Disaggregation of Revenue | The Company disaggregates revenues into categories that depict how the nature, amount, timing and uncertainty of the revenues and cashflows are affected by economic factors. For the three months ended March 31, 2022 and 2021, the Company disaggregated its revenues as follows: Three Months Ended March 31, 2022 2021 Revenue iAnthus branded products $ 22,158 $ 31,182 Third party branded products 17,147 15,207 Wholesale/bulk/other products 3,485 5,416 Total $ 42,790 $ 51,805 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Text Block [Abstract] | |
Summary of fair value hierarchy of Company's financial assets and financial liabilities | The following table summarizes the fair value hierarchy for the Company’s financial assets and financial liabilities that are re-measured March 31, 2022 December 31, 2021 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Financial Assets Long term investments—other 1 $ 454 $ — $ — $ 454 $ 568 $ — $ — $ 568 Financial Liabilities Derivative liabilities $ — $ — $ 4 $ 4 $ — $ — $ 16 $ 16 |
Summary of changes in level one finnacial assets | The following table summarizes the changes in Level 1 financial assets: Financial Assets Balance as of December 31, 2021 $ 568 Revaluations on Level 1 instruments (114 ) Balance as of March 31, 2022 $ 454 |
Summary of changes in level three financial assets and liabilities | The following table summarizes the changes in Level 3 financial assets and liabilities: Derivative Liabilities Balance as of December 31, 2021 $ 16 Revaluations on Level 3 instruments (12 ) Balance as of March 31, 2022 $ 4 |
Summary of long-term debt instruments at their carrying value and fair value | The following table summarizes the Company’s long-term debt instruments (Note 5) at their carrying value and fair value: March 31, 2022 December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value Unsecured Debentures $ 57,744 $ 67,566 $ 57,171 $ 64,596 Secured Notes 135,862 184,119 134,902 176,487 Other 1,292 1,021 1,307 1,021 Total $ 194,898 $ 252,706 $ 193,380 $ 242,104 |
Commitments (Tables)
Commitments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | The following table summarizes the Company’s contractual obligations and commitments as of March 31, 2022: For the twelve months ended March 31, 2023 2024 2025 2026 2027 Operating leases $ 7,895 $ 7,892 $ 8,065 $ 8,161 $ 7,835 Service contracts 2,705 2 — — — Long-term debt, principal (1) 168,205 12,969 68 16,987 81 Total $ 178,805 $ 20,863 $ 8,133 $ 25,148 $ 7,916 (1) The payment schedule above shows amounts payable if the conversion options are not exercised by the lender of the Company’s convertible debt instruments. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | March 31, December 31, Financial Statement Line Item Other long-term assets — 4,552 Total $ — $ 4,552 |
Unaudited Interim Condensed C_2
Unaudited Interim Condensed Consolidated Statements of Cash Flows Supplemental Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Summary of Cash Payments | (a) Cash payments made on account of: For the Three Months Ended March 31, 2022 2021 Income taxes $ 98 $ 657 Interest 23 24 |
Summary of Changes in Other Non-cash Operating Assets and Liabilities | (b) Changes in other non-cash For the Three Months Ended March 31, 2022 2021 Decrease (increase) in: Accounts receivables $ (81) $ (1,009 ) Prepaid expenses (1,809 ) (1,028 ) Inventories (3,258 ) (723 ) Other current assets 201 (1,374 ) Other long-term assets (13 ) 647 Operating leases (313 ) (203 ) Increase in: Accounts payable 3,561 1,599 Accrued and other current liabilities 6,359 6,883 $ 4,647 $ 4,792 |
Summary of Depreciation and Amortization of Assets | (c) Depreciation and amortization are comprised of the following: For the Three Months Ended March 31, 2022 2021 Property, plant and equipment $ 4,396 $ 2,977 Operating lease right-of-use 623 542 Intangible assets 4,010 3,855 $ 9,029 $ 7,374 |
Summary of Asset Write downs and Other Charges | (d) Write-downs and other charges are comprised of the following: For the Three Months Ended March 31, 2022 2021 Write-downs : Account receivable recoveries $ (12 ) $ — Operating lease right-of-use — 259 Property, plant and equipment 69 — $ 57 $ 259 |
Summary of significant non-cash investing and financing activities | (e) Significant non-cash For the Three Months Ended March 31, 2022 2021 Supplemental Cash Flow Information: Non-cash paid-in-kind 767 554 Non-cash consideration for asset acquisition 19,193 — |
Summary of reconciliation of cash and restricted cash | The following table provides a reconciliation of cash and restricted cash reported on the unaudited interim condensed consolidated balance sheets to such amounts presented in the statements of cash flows: March 31, December 31, 2021 Cash $ 14,078 $ 13,244 Restricted cash 2,641 3,334 Total cash and restricted cash presented in the statements of cash flows $ 16,719 $ 16,578 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Schedule of Debt Restructuring as per Restructuring Agreement for Subsequent Periods | (in ’000s of U.S. dollars) Restructured 1 Interim Financing 2 8% Senior 3 Pro Forma 4 Secured Lenders $ 85,000 $ 14,737 $ 5,000 48.625 % Unsecured Lenders — — 15,000 48.625 % Existing Shareholders — — — 2.75 % Total $ 85,000 $ 14,737 $ 20,000 100 % (1) The principal balance of the Secured Notes will be reduced to $85.0 million, which will be increased by the amount of the Interim Financing, which has a first lien, senior secured position over all of the Company’s assets, is non-convertible non-callable (2) The Secured Lenders provided $14.7 million of interim financing (“Interim Financing”) to iAnthus Capital Management, LLC (“ICM”) on substantially the same terms as the Restructured Senior Debt, net of a 5% original issue discount. The amounts of the Interim Financing along with any accrued interest thereon is expected to be converted into, and the original principal balance will be added to, the Restructured Senior Debt upon consummation of the Recapitalization Transaction. (3) The senior unsecured de bentures non-callable (the “8% Senior Unsecured Debentures”). (4) On January 6, 2022, the Company’s the Company its |
Organization and Description _4
Organization and Description of Business - Summary of Effects Of Reclassification Adjustment On The Line Items Of Consolidated Statements Of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Reclassification [Line Items] | ||
Selling, general and administrative expenses | $ 23,406 | $ 24,228 |
Revision of Prior Period Reclassification Adjustment [Member] | Reclassification of Depreciation and Amortization [Member] | ||
Reclassification [Line Items] | ||
Selling, general and administrative expenses | 542 | |
Depreciation and amortization | $ (542) |
Organization and Description _5
Organization and Description of Business - Summary of Effects of the Adjustment on the Line items Within Consolidated Financial Statements (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Jan. 01, 2022 | Dec. 31, 2020 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Inventories | $ 31,950 | $ 28,692 | |||
Current assets | 58,878 | 53,646 | |||
Total Assets | 359,695 | 344,989 | |||
Accrued and other current liabilities | 110,817 | 98,933 | |||
Current liabilities | 314,574 | 285,308 | |||
Total Liabilities | 391,972 | 368,628 | |||
Accumulated deficit | (811,734) | (801,632) | $ (801,632) | ||
Total Shareholders' Deficit | (32,277) | $ 29,511 | (23,639) | (23,639) | $ 47,329 |
Total Liabilities and Shareholders' Deficit | 359,695 | 344,989 | |||
Costs and expenses applicable to revenues | (20,298) | (22,084) | (93,490) | ||
Gross profit | 22,492 | 29,721 | 109,528 | ||
Loss from operations | (9,377) | (1,598) | (23,780) | ||
Loss from operations before income tax | (55,754) | ||||
Income tax expense | 4,875 | 7,291 | 21,736 | ||
Net loss | $ (10,102) | $ (19,452) | $ (77,490) | ||
Earnings per share | $ (0.45) | ||||
Previously Reported [Member] | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Inventories | $ 30,447 | ||||
Current assets | 55,401 | ||||
Total Assets | 346,744 | ||||
Accrued and other current liabilities | 99,446 | ||||
Current liabilities | 285,821 | ||||
Total Liabilities | 369,141 | ||||
Accumulated deficit | (800,390) | (800,390) | |||
Total Shareholders' Deficit | (22,397) | (22,397) | |||
Total Liabilities and Shareholders' Deficit | 346,744 | ||||
Costs and expenses applicable to revenues | (91,735) | ||||
Gross profit | 111,283 | ||||
Loss from operations | (22,025) | ||||
Loss from operations before income tax | (53,999) | ||||
Income tax expense | 22,249 | ||||
Net loss | $ (76,248) | ||||
Earnings per share | $ (0.44) | ||||
Revision of Prior Period, Adjustment [Member] | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Inventories | $ (1,755) | ||||
Current assets | (1,755) | ||||
Total Assets | (1,755) | ||||
Accrued and other current liabilities | (513) | ||||
Current liabilities | (513) | ||||
Total Liabilities | (513) | ||||
Accumulated deficit | (1,242) | (1,242) | |||
Total Shareholders' Deficit | (1,242) | $ (1,242) | |||
Total Liabilities and Shareholders' Deficit | (1,755) | ||||
Costs and expenses applicable to revenues | (1,755) | ||||
Gross profit | (1,755) | ||||
Loss from operations | (1,755) | ||||
Loss from operations before income tax | (1,755) | ||||
Income tax expense | (513) | ||||
Net loss | $ (1,242) | ||||
Earnings per share | $ (0.01) |
Organization and Description _6
Organization and Description of Business - Additional Information (Detail) $ in Thousands | Apr. 01, 2022License | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Feb. 01, 2022USD ($) | Jan. 07, 2022 | Jan. 01, 2022USD ($) | Aug. 20, 2021 | Jul. 10, 2020USD ($) |
Net income (loss) | $ (10,102) | $ (19,452) | $ (77,490) | ||||||
Accumulated deficit | (811,734) | $ (801,632) | $ (801,632) | ||||||
Debt instrument debt default amount | 97,500 | ||||||||
Debt instrument debt default principal amount | 60,000 | ||||||||
Debt instrument debt default accrued additional fees and interest | 15,800 | ||||||||
Debt instrument face amount | $ 4,600 | ||||||||
Net Cash Provided by (Used in) Operating Activities | 1,751 | 5,452 | |||||||
MD | Subsequent Event [Member] | |||||||||
Number of licensed entities being controlled | License | 4 | ||||||||
MPX New Jersey LLC [Member] | |||||||||
Percentage of voting equity interests acquired | 100.00% | 100.00% | |||||||
Revenue [Member] | |||||||||
Increase in cost and expenses | $ 2,900 | ||||||||
Recapitalization transaction [Member] | |||||||||
Debt instrument face amount | $ 14,700 | ||||||||
Secured Debt [Member] | |||||||||
Debt Instrument debt default accrued interest amount | 34,800 | ||||||||
Unsecured Debt [Member] | |||||||||
Debt Instrument debt default accrued interest amount | $ 10,800 | ||||||||
Senior secured convertible debentures [Member] | |||||||||
Debt instrument interest rate | 13.00% | ||||||||
Convertible unsecured debentures [Member] | |||||||||
Debt instrument interest rate | 8.00% |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Sublease income | $ 0.2 | $ 0 |
Selling, General and Administrative Expenses, and Depreciation and Amortization Expenses [Member] | ||
Operating lease expense | $ 2.2 | $ 2.4 |
Minimum [Member] | ||
Sublease lease term | 1 year | |
Maximum [Member] | ||
Sublease lease term | 15 years |
Leases - Summary of Maturities
Leases - Summary of Maturities of Lease Liabilities for Operating Leases (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2023 | $ 7,895 | |
2024 | 7,892 | |
2025 | 8,065 | |
2026 | 8,161 | |
2027 | 7,835 | |
Thereafter | 58,473 | |
Total lease payments | 98,321 | |
Less: interest expense | (60,961) | |
Present value of lease liabilities | $ 37,360 | $ 35,156 |
Weighted-average remaining lease term (years) | 11 years 4 months 24 days | |
Weighted-average discount rate | 20.00% |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Balance Sheet Information Related to Leases (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Disclosure Of Supplemental Balance Sheet Information Related To Leases [Abstract] | ||
Right-of-use assets | $ 32,529 | $ 30,429 |
Lease Liabilities | ||
Current portion of lease liabilities | 7,895 | 7,342 |
Long-term lease liabilities | 29,465 | 27,814 |
Total | $ 37,360 | $ 35,156 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Supplies | $ 6,744 | $ 6,188 |
Raw materials | 8,059 | 5,641 |
Work in process | 8,444 | 9,464 |
Finished goods | 8,703 | 7,399 |
Total | $ 31,950 | $ 28,692 |
Inventories - Additional Inform
Inventories - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Inventory [Line Items] | ||
Inventory | $ 0.3 | $ 0.2 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Feb. 01, 2022 | |
Business Acquisition [Line Items] | |||
Principal Amount Of Loan And Accured Interest | $ 4.6 | ||
Percentage of Remaining Acquisition By Exercised The Options | 1.00% | ||
Business Combination, Acquisition Related Costs | $ 0.2 | $ 0 | |
MPX New Jersey [Member] | |||
Business Acquisition [Line Items] | |||
Percentage of conversion of loan into equity | 99.00% | ||
MPX NJ [Member] | |||
Business Acquisition [Line Items] | |||
Business combination , non cash consideration | 14.5 | ||
Tax impact on business combination | 4.1 | ||
MPX NJ [Member] | Other Income [Member] | |||
Business Acquisition [Line Items] | |||
Gain loss on business combination | $ 10.5 |
Acquisitions - Summary of Busin
Acquisitions - Summary of Business Acquisitions Allocation of the purchase price (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Consideration | |
Total | $ 19,194 |
Assets acquired and liabilities assumed | |
Total | 19,194 |
MPX New Jersey [Member] | |
Consideration | |
Cash | 1 |
Settlement of pre-existing relationships | 19,193 |
Assets acquired and liabilities assumed | |
Cash | 5 |
Fixed assets | 100 |
Other non-current assets | 15 |
Intangible assets | 19,100 |
Accounts payable | (15) |
Accrued and other current liabilities | $ (11) |
Long-Term Debt - Summary of Lon
Long-Term Debt - Summary of Long-term Debt Instruments (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Debt Instrument [Line Items] | ||
Beginning balance | $ 193,380 | |
Fair value of financial liabilities issued | 767 | |
Accretion of balance | 766 | |
Repayment | (15) | $ (14) |
Ending balance | 194,898 | |
Secured Notes | ||
Debt Instrument [Line Items] | ||
Beginning balance | 134,902 | |
Fair value of financial liabilities issued | 767 | |
Accretion of balance | 193 | |
Ending balance | 135,862 | |
May 2019 Debentures | ||
Debt Instrument [Line Items] | ||
Beginning balance | 24,033 | |
Accretion of balance | 200 | |
Ending balance | 24,233 | |
March 2019 Debentures | ||
Debt Instrument [Line Items] | ||
Beginning balance | 33,138 | |
Accretion of balance | 373 | |
Ending balance | 33,511 | |
Other | ||
Debt Instrument [Line Items] | ||
Beginning balance | 1,307 | |
Fair value of financial liabilities issued | 0 | |
Accretion of balance | 0 | |
Repayment | (15) | |
Ending balance | $ 1,292 |
Long-Term Debt - Summary of L_2
Long-Term Debt - Summary of Long-term Debt Instruments (Parenthetical) (Detail) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Debt instrument, unamortized discount | $ 30.3 | $ 30.3 |
Unamortized discount costs | 2.7 | 3.2 |
Debt issuance costs, net | 7.7 | 7.7 |
Unamortized debt issuance costs | 2.2 | 2.5 |
Interest accrued on current and long term debt | 51.1 | $ 45.6 |
Secured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt exit fee payable | $ 10 | |
Interest rate percentage on the exit fee | 13.00% |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) $ / shares in Units, $ in Thousands | Feb. 02, 2021USD ($) | Jul. 13, 2020USD ($) | Dec. 20, 2019USD ($) | Sep. 30, 2019USD ($) | May 02, 2019USD ($)$ / sharesshares | Mar. 18, 2019USD ($)$ / sharesshares | May 14, 2018USD ($)$ / shares | Mar. 31, 2022USD ($)$ / shares | Mar. 31, 2021USD ($) | Feb. 01, 2022USD ($) | Dec. 31, 2021USD ($)$ / shares | Apr. 04, 2021USD ($) | Mar. 31, 2019 |
Debt Instrument [Line Items] | |||||||||||||
Debt instrument face value | $ 4,600 | ||||||||||||
Interest expense | $ 400 | $ 400 | |||||||||||
Accretion expense | 766 | 4,852 | |||||||||||
Long term debt default amount principal | 97,500 | ||||||||||||
Secured debt long term fair value | 252,706 | $ 242,104 | |||||||||||
Unamortized debt issuance costs | $ 2,200 | $ 2,500 | |||||||||||
Class of warrants or rights exercise price per share | $ / shares | $ 2.49 | $ 3.56 | |||||||||||
Cash balance | $ 14,078 | $ 13,244 | |||||||||||
Private Placement [Member] | March 2019 Equity Warrants [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument maturity date | Mar. 15, 2023 | ||||||||||||
Interest rate on secured notes | 8.00% | ||||||||||||
Debt instrument terms of interest payment | payable quarterly | ||||||||||||
Class of warrants or rights number of shares covered by warrants or rights | shares | 2,177,291 | ||||||||||||
Class of warrants or rights exercise price per share | $ / shares | $ 6.43 | ||||||||||||
Class of warrant or rights expiry date | Mar. 15, 2022 | ||||||||||||
Private Placement [Member] | May 2019 Equity Warrants [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument maturity date | Mar. 15, 2023 | ||||||||||||
Debt instrument terms of interest payment | payable quarterly | ||||||||||||
Class of warrants or rights number of shares covered by warrants or rights | shares | 1,555,207 | ||||||||||||
Class of warrants or rights exercise price per share | $ / shares | $ 6.43 | ||||||||||||
Private Placement [Member] | In Cash [Member] | March 2019 Equity Warrants [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Percentage of total interest that can be paid through cash or in kind route | 50.00% | ||||||||||||
I Anthus New Jersey LLC [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Description about qualified financing | “Qualified Financing” means a transaction or series of related transactions resulting in net proceeds to the Company of not less than $10 million from the subscription of the Company’s securities, including, but not limited to, a private placement or rights offering. | ||||||||||||
Threshold limit of qualified financing, net proceeds not less than the subscription of securities | $ 10,000 | ||||||||||||
Secured Debt [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Long term debt exit fee payable | 10,000 | ||||||||||||
Secured Debt [Member] | Tranche One [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument face value | $ 40,000 | ||||||||||||
Debt instrument maturity date | May 14, 2021 | ||||||||||||
Interest rate on secured notes | 16.00% | ||||||||||||
Debt instrument conversion price per share | $ / shares | $ 3.08 | ||||||||||||
Debt instrument beneficial conversion feature | $ 7,900 | ||||||||||||
Interest expense | 1,700 | 1,700 | |||||||||||
Accretion expense | 0 | 2,300 | |||||||||||
Long term debt default amount principal | 97,500 | $ 60,000 | |||||||||||
Long term debt default amount accrued interest | 34,800 | $ 10,800 | |||||||||||
Long term debt exit fee payable principal and interest | 15,800 | 14,200 | |||||||||||
Long term debt exit fee payable | 10,300 | 10,300 | |||||||||||
Interest payable on exit fee | $ 5,500 | 3,900 | |||||||||||
Debt instrument financial covenant description | The terms also contain a financial covenant requiring the Company’s asset value to be 1.75 times the total net debt at each quarter end and requires that the Company maintain a minimum cash balance of $1.0 million while the Tranche One Secured Notes remain outstanding (the “market value test”) | ||||||||||||
Financial covenant requires to maintain ratio of asset value to net debt | 1.75 | ||||||||||||
Cash balance | $ 1,000 | ||||||||||||
Secured Debt [Member] | Tranche One [Member] | Accretion Expense [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Amortization of debt discount | 0 | 700 | |||||||||||
Secured Debt [Member] | Tranche Two [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument face value | $ 20,000 | ||||||||||||
Debt instrument maturity date | May 14, 2021 | ||||||||||||
Interest rate on secured notes | 13.00% | ||||||||||||
Interest expense | 800 | 800 | |||||||||||
Accretion expense | 0 | 500 | |||||||||||
Secured Debt [Member] | Tranche Three [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument face value | $ 36,200 | ||||||||||||
Debt instrument maturity date | May 14, 2021 | ||||||||||||
Interest rate on secured notes | 13.00% | ||||||||||||
Interest expense | 1,400 | 1,400 | |||||||||||
Accretion expense | 0 | 1,100 | |||||||||||
Secured Debt [Member] | Tranche Four [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument face value | $ 14,700 | ||||||||||||
Debt instrument maturity date | Jul. 13, 2025 | ||||||||||||
Interest expense | 300 | 300 | |||||||||||
Accretion expense | 100 | 100 | |||||||||||
Debt instrument original issue discount percentage | 8.00% | ||||||||||||
New Jersey Senior Secured Bridge Notes [Member] | I Anthus New Jersey LLC [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument face value | $ 11,000 | ||||||||||||
Debt instrument maturity date | Feb. 2, 2023 | ||||||||||||
Interest rate on secured notes | 14.00% | ||||||||||||
Interest expense | 400 | 200 | |||||||||||
Accretion expense | 100 | 100 | |||||||||||
Secured debt long term fair value | $ 10,300 | ||||||||||||
Unamortized debt issuance costs | $ 700 | ||||||||||||
Escrow deposit | 2,600 | $ 3,300 | |||||||||||
New Jersey Senior Secured Bridge Notes [Member] | Prospective Recapitalization Transaction [Member] | I Anthus New Jersey LLC [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate on secured notes | 8.00% | ||||||||||||
New Jersey Senior Secured Bridge Notes [Member] | Prospective Default [Member] | I Anthus New Jersey LLC [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate on secured notes | 25.00% | ||||||||||||
March 2019 Debentures [Member] | Private Placement [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument face value | $ 35,000 | ||||||||||||
Interest expense | 700 | 700 | |||||||||||
Accretion expense | $ 400 | 400 | |||||||||||
March 2019 Debentures [Member] | Private Placement [Member] | In Cash [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Percentage of total interest that can be paid through cash or in kind route | 50.00% | ||||||||||||
May 2019 Debentures [Member] | Private Placement [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument face value | $ 25,000 | ||||||||||||
Interest rate on secured notes | 8.00% | ||||||||||||
Interest expense | $ 500 | 500 | |||||||||||
Accretion expense | $ 200 | $ 200 |
Share Capital - Summary of Warr
Share Capital - Summary of Warrants Activity (Detail) - Warrants [Member] | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Warrants outstanding units beginning balance | shares | 22,640 |
Warrants outstanding units granted | shares | 0 |
Warrants outstanding units exercised | shares | 0 |
Warrants outstanding units expired | shares | (4,685) |
Warrants outstanding units ending balance | shares | 17,955 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Weighted average exercise price beginning balance | $ / shares | $ 3.56 |
Weighted average exercise price granted | $ / shares | |
Weighted average exercise price exercised | $ / shares | |
Warrants Outstanding Weighted Average Exercise Price, Expired | $ / shares | 7.53 |
Weighted average exercise price ending balance | $ / shares | $ 2.49 |
Share Capital - Summary of Assu
Share Capital - Summary of Assumptions Used To Record Fair Value of Warrants (Detail) - Warrants [Member] | Mar. 31, 2022yr | Dec. 31, 2021yr |
Risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.9 | 0.9 |
Expected dividend yield | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 0 | 0 |
Expected voltility | Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 124 | 93.7 |
Expected voltility | Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 137.1 | 297.1 |
Expected life | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.9 | 0.9 |
Share Capital - Summary of Wa_2
Share Capital - Summary of Warrants Outstanding (Detail) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Class of Warrant or Right [Line Items] | ||
Number outstanding | 17,955 | 22,640 |
Weighted average exercise price | $ 2.49 | $ 3.56 |
Class Of Warrants Expire On 2022 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number outstanding | 16,170 | 20,855 |
Weighted average exercise price | $ 2.26 | $ 3.47 |
Class Of Warrants Expire On 2023 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number outstanding | 1,785 | 1,785 |
Weighted average exercise price | $ 4.57 | $ 4.57 |
Share Capital - Summary of Pote
Share Capital - Summary of Potentially Dilutive Securities (Detail) - shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | ||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | |||
Common share options | 9,620 | 10,504 | |
Warrants | 17,955 | 22,640 | |
Secured notes | 46,458 | 46,458 | |
Debentures | 10,135 | 10,135 | |
MPX dilutive instruments | [1] | 408 | 408 |
Total | 84,576 | 90,145 | |
[1] | Prior to the acquisition of MPX Bioceutical Corporation (“MPX”) on February 5, 2019 (the “MPX Acquisition”), MPX had instruments outstanding that were potentially dilutive and as a result of the MPX Acquisition, the Company assumed certain of these instruments. |
Share Capital - Summary of Pot
Share Capital - Summary of Potentially Dilutive Securities (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Common Stock [Member] | ||
Common shares amount | $ 18.4 | $ 16.4 |
Share Capital - Summary Of Opti
Share Capital - Summary Of Option Activity (Detail) - Stock Option [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Beginning balance outstanding | 10,504 | 11,510 |
Granted units | 0 | 0 |
Exercised units | 0 | 0 |
Forfeited/Expired units | (884) | (1,006) |
Ending balance outstanding | 9,620 | 10,504 |
Weighted average exercise price beginning balance | $ 4.95 | $ 4.86 |
Weighted average exercise price granted | 0 | |
Weighted average exercise price exercised | ||
Weighted average exercise price forfeited/expired | 4.79 | 3.96 |
Weighted average exercise price ending balance | $ 4.96 | $ 4.95 |
Weighted average contractual life | 5 years 11 months 19 days | 6 years 2 months 26 days |
Share Capital - Additional Info
Share Capital - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Warrants fair value | $ 0.1 | $ 0.1 | |
Fair value adjustment of warrants | (0.1) | $ 0.1 | |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 0.4 | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 6 months | ||
Selling, general and administrative expenses | |||
Share-based payment arrangement expense | $ 1.5 | $ 1.6 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Expense and Effective Tax Rates (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Components of Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
Loss before income taxes | $ (5,227) | $ (12,161) | |
Income tax expense | $ 4,875 | $ 7,291 | $ 21,736 |
Effective tax rate | (93.30%) | (60.00%) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Federal statutory rate | 21.00% |
Segment Information - Summary o
Segment Information - Summary of Reportable Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | ||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 42,790 | $ 51,805 | ||
Gross profit | 22,492 | 29,721 | $ 109,528 | |
Depreciation and amortization | 9,029 | 7,374 | ||
Depreciation and amortization | 8,406 | 6,832 | ||
Writedowns Recoveries And Other Charges Net | 57 | 259 | ||
Net income (loss) | (10,102) | (19,452) | (77,490) | |
Purchase of property, plant and equipment | 1,573 | 4,752 | ||
Purchase of intangibles | 61 | 0 | ||
Assets | 359,695 | 344,989 | ||
Eastern Region | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 24,785 | 33,056 | ||
Gross profit | 16,068 | 21,162 | ||
Depreciation and amortization | 5,259 | 5,876 | ||
Writedowns Recoveries And Other Charges Net | 69 | 259 | ||
Net income (loss) | 7,328 | 2,916 | ||
Purchase of property, plant and equipment | 1,220 | 4,745 | ||
Assets | 240,291 | 222,350 | ||
Western Region | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 17,716 | 18,302 | ||
Gross profit | 6,411 | 8,580 | ||
Depreciation and amortization | 3,012 | 757 | ||
Writedowns Recoveries And Other Charges Net | 0 | 0 | ||
Net income (loss) | (913) | 335 | ||
Purchase of property, plant and equipment | 351 | 3 | ||
Assets | 103,441 | 106,485 | ||
Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | [1] | 289 | 447 | |
Gross profit | 13 | (21) | ||
Depreciation and amortization | 135 | 199 | ||
Writedowns Recoveries And Other Charges Net | (12) | 0 | ||
Net income (loss) | (16,517) | (22,703) | ||
Purchase of property, plant and equipment | 2 | $ 4 | ||
Purchase of intangibles | 61 | |||
Assets | $ 15,963 | $ 16,154 | ||
[1] | Revenues from segments below the quantitative thresholds are attributable to an operating segment of the Company that includes revenue from the sale of CBD products throughout the United States. This segment has never met any of the quantitative thresholds for determining reportable segments nor does it meet the qualitative criteria for aggregation with the Company’s reportable segments. |
Segment Information - Summary_2
Segment Information - Summary of Disaggregation of Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 42,790 | $ 51,805 |
iAnthus branded products | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 22,158 | 31,182 |
Third party branded products | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 17,147 | 15,207 |
Wholesale/bulk/other products | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 3,485 | $ 5,416 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) - Customer Concentration Risk - Revenue Benchmark - Customer | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Product Information [Line Items] | ||
Entity wide revenue major customer | 0 | 0 |
Customer [Member] | ||
Product Information [Line Items] | ||
Credit risk | 10.00% |
Financial Instruments - Summary
Financial Instruments - Summary of Fair Value Hierarchy of Company's Financial Assets and Financial Liabilities (Detail) - Fair Value, Recurring - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | |
Derivative Financial Instruments, Liabilities [Member] | |||
Financial Liabilities | |||
Derivative liabilities | $ 4 | $ 16 | |
Derivative Financial Instruments, Liabilities [Member] | Level 3 [Member] | |||
Financial Liabilities | |||
Derivative liabilities | 4 | 16 | |
Other Long-term Investments [Member] | |||
Financial Assets | |||
Long term investments—other | [1] | 454 | 568 |
Other Long-term Investments [Member] | Level 1 [Member] | |||
Financial Assets | |||
Long term investments—other | [1] | $ 454 | $ 568 |
[1] | Long-term investments – other are included in the investments balance on the unaudited interim condensed consolidated balance sheets. |
Financial Instruments - Summa_2
Financial Instruments - Summary of Changes in Level One Financial Assets (Detail) - Other Long-term Investments [Member] - Level 1 [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Beginning balance | $ 568 |
Revaluations on Level 1 instruments | (114) |
Ending balance | $ 454 |
Financial Instruments - Summa_3
Financial Instruments - Summary of Changes in Level Three Financial Assets and Liabilities (Detail) - Derivative Financial Instruments, Liabilities [Member] - Level 3 [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Beginning balance | $ 16 |
Revaluations on Level 3 instruments | (12) |
Ending balance | $ 4 |
Financial Instruments - Summa_4
Financial Instruments - Summary of Companys Long Term Debt Instruments at their Carrying Value and Fair Value (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Carrying value | $ 194,898 | $ 193,380 |
Fair value | 252,706 | 242,104 |
Unsecured Debentures | ||
Debt Instrument [Line Items] | ||
Carrying value | 57,744 | 57,171 |
Fair value | 67,566 | 64,596 |
Secured Notes | ||
Debt Instrument [Line Items] | ||
Carrying value | 135,862 | 134,902 |
Fair value | 184,119 | 176,487 |
Other Long Term Debt | ||
Debt Instrument [Line Items] | ||
Carrying value | 1,292 | 1,307 |
Fair value | $ 1,021 | $ 1,021 |
Commitments - Summary of contr
Commitments - Summary of contractual obligations and commitments (Detail) $ in Thousands | Mar. 31, 2022USD ($) | |
Contractual Obligation Fiscal Year Maturity Schedule [Line Items] | ||
2023 | $ 178,805 | |
2024 | 20,863 | |
2025 | 8,133 | |
2026 | 25,148 | |
2027 | 7,916 | |
Operating leases [Member] | ||
Contractual Obligation Fiscal Year Maturity Schedule [Line Items] | ||
2023 | 7,895 | |
2024 | 7,892 | |
2025 | 8,065 | |
2026 | 8,161 | |
2027 | 7,835 | |
Service Contracts [Member] | ||
Contractual Obligation Fiscal Year Maturity Schedule [Line Items] | ||
2023 | 2,705 | |
2024 | 2 | |
2025 | 0 | |
2026 | ||
2027 | ||
Long term Debt Principal [Member] | ||
Contractual Obligation Fiscal Year Maturity Schedule [Line Items] | ||
2023 | 168,205 | [1] |
2024 | 12,969 | [1] |
2025 | 68 | |
2026 | 16,987 | [1] |
2027 | $ 81 | [1] |
[1] | The payment schedule above shows amounts payable if the conversion options are not exercised by the lender of the Company’s convertible debt instruments. |
Commitments - Additional Inform
Commitments - Additional Information (Detail) | Mar. 31, 2022 |
Maximum [Member] | |
Contractual Obligation Fiscal Year Maturity Schedule [Line Items] | |
Operating leases with renewal options | 15 years |
Minimum [Member] | |
Contractual Obligation Fiscal Year Maturity Schedule [Line Items] | |
Operating leases with renewal options | 1 month |
Contingencies And Guarantees -
Contingencies And Guarantees - Additional Information (Detail) - USD ($) $ in Thousands | Aug. 19, 2021 | Jan. 31, 2019 | Mar. 31, 2022 | Dec. 31, 2021 | Feb. 01, 2022 | Dec. 31, 2020 | Apr. 19, 2020 |
Contingencies And Guarantees [Line Items] | |||||||
Loss contingency claim for right to receive consulting fees and punitive damages | $ 500 | ||||||
Total damages claimed value | $ 5,400 | ||||||
Total Damages Sought Value | 167,000 | ||||||
Claim for alleged payments | 1,300 | ||||||
Claim for right to receive | $ 115,000 | ||||||
Debt instrument face value | $ 4,600 | ||||||
Litigation Settlement, Amount Awarded to Other Party | $ 1,500 | ||||||
Payments for Legal Settlements | 700 | ||||||
Accrued and Other Current Liabilities [Member] | |||||||
Contingencies And Guarantees [Line Items] | |||||||
Litigation Settlement, Remaining Amount Awarded to Other Party | 800 | ||||||
Maximum [Member] | |||||||
Contingencies And Guarantees [Line Items] | |||||||
Total Damages Sought Value | $ 10,000 | ||||||
Minimum [Member] | |||||||
Contingencies And Guarantees [Line Items] | |||||||
Total Damages Sought Value | $ 1,000 | ||||||
Claim against ICHMPX ULC And MPX [Member] | |||||||
Contingencies And Guarantees [Line Items] | |||||||
Loss Contingency Accrual | 3,000 | ||||||
Claim by prior shareholders of Grow Healthy Holdings LLC [Member] | |||||||
Contingencies And Guarantees [Line Items] | |||||||
Loss Contingency Accrual | $ 22,000 | ||||||
Claim by Himed LLC an equity holder and holder of unsecured debentures [Member] | |||||||
Contingencies And Guarantees [Line Items] | |||||||
Debt instrument face value | $ 5,000 | ||||||
Claims filed by oasis investments two master funds limited for breaching debt covenants [Member] | |||||||
Contingencies And Guarantees [Line Items] | |||||||
Unsecured debt payable | $ 25,000,000 |
Related Party Transactions - Su
Related Party Transactions - Summary of Related Party Transactions (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Related Party Transaction [Line Items] | ||
Other long-term assets | $ 0 | $ 4,552 |
Total | $ 0 | $ 4,552 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) C$ in Millions, $ in Millions | Feb. 05, 2019USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | May 31, 2022USD ($) | Jan. 07, 2022 | Aug. 20, 2021 | Jun. 30, 2017NIO (C$) |
Related Party Transaction [Line Items] | |||||||||
Business Combination, Acquisition Related Costs | $ 0.2 | $ 0 | |||||||
MPX NJ [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Equity Method Investment, Ownership Percentage | 99.00% | ||||||||
Business Combination, Acquisition Related Costs | 0.2 | $ 0 | |||||||
Revolving Credit Facility [Member] | Hadley Ford [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Line of credit accrued interest rate | 2.50% | ||||||||
Receivable with imputed interest due date | Jun. 30, 2021 | ||||||||
Line of Credit outstanding Amount | 0 | $ 0 | |||||||
Line of credit facility maximum borrowing capacity | $ 0.4 | C$ 0.5 | |||||||
Remaining line of credit amount was offset by additional compensation | 0.5 | ||||||||
MPX [Member] | Elizabeth Stavola [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Accounts recievable due from a related party | $ 0.7 | ||||||||
MPX [Member] | Revolving Credit Facility [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party receivable was converted into a loan facility | $ 10 | ||||||||
Line of credit accrued interest rate | 16.00% | ||||||||
Receivable with imputed interest due date | Dec. 31, 2021 | ||||||||
Line of Credit outstanding Amount | 4.6 | $ 0 | |||||||
Line of Credit accrued interest | $ 0.9 | ||||||||
MPX New Jersey LLC [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Percentage of interest to be acquired | 1.00% | ||||||||
Percentage of voting equity interests acquired | 100.00% | 100.00% |
Unaudited Interim Condensed C_3
Unaudited Interim Condensed Consolidated Statements of Cash Flows Supplemental Information - Summary of Cash Payments (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Supplemental Cash Flow Information [Abstract] | ||
Income taxes | $ 98 | $ 657 |
Interest | $ 23 | $ 24 |
Unaudited Interim Condensed C_4
Unaudited Interim Condensed Consolidated Statements of Cash Flows Supplemental Information - Summary of Changes in Other Non-Cash Operating Assets and Liabilities (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Increase (Decrease) in Operating Capital [Abstract] | ||
Decrease (increase) in accounts receivables | $ (81) | $ (1,009) |
Decrease (increase) in prepaid expenses | (1,809) | (1,028) |
Decrease (increase) in inventories | (3,258) | (723) |
Decrease (increase) in other current assets | 201 | (1,374) |
Decrease (increase) in Other long-term assets | (13) | 647 |
Decrease (increase) in Operating leases | (313) | (203) |
Increase (decrease) in accounts payable | 3,561 | 1,599 |
Increase (decrease) in accrued and other liabilities | 6,359 | 6,883 |
Total | $ 4,647 | $ 4,792 |
Unaudited Interim Condensed C_5
Unaudited Interim Condensed Consolidated Statements of Cash Flows Supplemental Information - Summary of Depreciation and Amortization Of Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Depreciation And Amortization [Line Items] | ||
Depreciation and amortization | $ 9,029 | $ 7,374 |
Property, plant and equipment | ||
Depreciation And Amortization [Line Items] | ||
Depreciation and amortization | 4,396 | 2,977 |
Operating lease right-of-use assets | ||
Depreciation And Amortization [Line Items] | ||
Depreciation and amortization | 623 | 542 |
Other intangible assets | ||
Depreciation And Amortization [Line Items] | ||
Depreciation and amortization | $ 4,010 | $ 3,855 |
Unaudited Interim Condensed C_6
Unaudited Interim Condensed Consolidated Statements of Cash Flows Supplemental Information - Summary of Asset Write-downs and Other Charges (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Write-downs and other charges | ||
Asset Write Downs And Other Charges [Line Items] | ||
Asset write-downs and other charges | $ 57 | $ 259 |
Accounts receivable provisions | Write-downs and other charges | ||
Asset Write Downs And Other Charges [Line Items] | ||
Asset write-downs and other charges | (12) | 0 |
Property, plant and equipment | ||
Asset Write Downs And Other Charges [Line Items] | ||
Asset write-downs and other charges | $ 69 | |
Operating lease right-of-use assets | ||
Asset Write Downs And Other Charges [Line Items] | ||
Asset write-downs and other charges | $ 259 |
Unaudited Interim Condensed C_7
Unaudited Interim Condensed Consolidated Statements of Cash Flows Supplemental Information - Summary of Significant Non-Cash Investing and Financing Activities (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash Flow Non Cash Investing And Financing Activities Disclosure [Line Items] | ||
Non-cash consideration for paid-in-kind interest | $ 5,894 | $ 5,678 |
New Jersey Senior Secured Bridge Notes [Member] | I Anthus New Jersey LLC [Member] | ||
Cash Flow Non Cash Investing And Financing Activities Disclosure [Line Items] | ||
Non-cash consideration for paid-in-kind interest | 767 | $ 554 |
Non-cash consideration for asset acquisition | $ 19,193 |
Unaudited Interim Condensed C_8
Unaudited Interim Condensed Consolidated Statements of Cash Flows Supplemental Information - Summary Of Reconciliation of Cash And Restricted Cash (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash | $ 14,078 | $ 13,244 | ||
Restricted cash | 2,641 | 3,334 | ||
Total cash and restricted cash presented in statements of cash flows | $ 16,719 | $ 16,578 | $ 22,127 | $ 11,510 |
Unaudited Interim Condensed C_9
Unaudited Interim Condensed Consolidated Statements of Cash Flows Supplemental Information - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Condensed Cash Flow Statements, Captions [Line Items] | ||
Restricted cash | $ 2,641 | $ 3,334 |
Tranche Four Secured Notes [Member] | Funds Held In Escrow [Member] | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Restricted cash | $ 2,600 | $ 3,300 |
Subsequent Events - Schedule of
Subsequent Events - Schedule of Debt Restructuring as per Restructuring Agreement for Subsequent Periods (Detail) $ in Thousands | Jul. 10, 2020USD ($) |
Restructured Senior Debt [Member] | |
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | |
Troubled debt restructuring debtor | $ 85,000 |
Restructured Senior Debt [Member] | Secured Lenders [Member] | |
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | |
Troubled debt restructuring debtor | 85,000 |
Interim Financing [member] | |
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | |
Troubled debt restructuring debtor | 14,737 |
Interim Financing [member] | Secured Lenders [Member] | |
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | |
Troubled debt restructuring debtor | 14,737 |
8% Senior Unsecured Debentures [Member] | |
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | |
Troubled debt restructuring debtor | 20,000 |
8% Senior Unsecured Debentures [Member] | Secured Lenders [Member] | |
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | |
Troubled debt restructuring debtor | 5,000 |
8% Senior Unsecured Debentures [Member] | Unsecured Lenders [Member] | |
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | |
Troubled debt restructuring debtor | $ 15,000 |
Proforma Common Equity [Member] | |
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | |
Troubled debt restructuring debtor percentage | 100.00% |
Proforma Common Equity [Member] | Secured Lenders [Member] | |
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | |
Troubled debt restructuring debtor percentage | 48.625% |
Proforma Common Equity [Member] | Unsecured Lenders [Member] | |
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | |
Troubled debt restructuring debtor percentage | 48.625% |
Proforma Common Equity [Member] | Existing Shareholders [Member] | |
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | |
Troubled debt restructuring debtor percentage | 2.75% |
Subsequent Events - Schedule _2
Subsequent Events - Schedule of Debt Restructuring as per Restructuring Agreement for Subsequent Periods (Parenthetical) (Detail) - USD ($) $ in Millions | Jan. 06, 2022 | Jul. 13, 2020 |
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | ||
Long term incentive program percent | 5.75% | |
8% Senior Unsecured Debentures [Member] | ||
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | ||
Debt instrument interest rate stated percentage | 8.00% | |
After Consummation of Recapitalization Transaction [member] | 8% Senior Unsecured Debentures [Member] | ||
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | ||
Debt instrument maturity date | five years | |
Interim Financing [Member] | ICM [member] | ||
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | ||
Proceeds from short term loans | $ 14.7 | |
Restructured Senior Debt [member] | Payment in Kind (PIK) Note [member] | ||
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | ||
Debt instrument interest rate stated percentage | 8.00% | |
Restructured Senior Debt [member] | Secured Convertible Notes [member] | ||
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | ||
Decrease in pricipal balance of debt instrument | $ 85 | |
Restructured Senior Debt [member] | After Consummation of Recapitalization Transaction [member] | ||
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | ||
Debt instrument maturity date | five years |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ in Thousands | May 06, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Jan. 07, 2022 | Aug. 20, 2021 |
Interim Chief Executive Officer President And Director [Member] | Subsequent Event [Member] | |||||
Severance payments | $ 4,800 | ||||
Interim Chief Executive Officer President And Director [Member] | Deferred Bonus [Member] | Subsequent Event [Member] | |||||
unpaid bonus amount | 300,000,000 | ||||
Interim Chief Executive Officer President And Director [Member] | Separation Agreement [Member] | |||||
cash compensation amount | 12,200 | ||||
cash compensation Paid out | 5,100 | ||||
Separation Payments Monthly Installments Amount | $ 900 | ||||
Separation Payments Monthly Installments Period | 8 months | ||||
Interim Chief Executive Officer President And Director [Member] | Separation Agreement [Member] | Subsequent Event [Member] | |||||
Additional extended service period | 6 months | ||||
Monthly base compensation to be paid | $ 25,000 | ||||
MPX New Jersey LLC [Member] | |||||
Percentage of voting equity interests acquired | 100.00% | 100.00% | |||
Recapitalization | Selling, general and administrative expenses | |||||
Restructuring costs incurred | $ 400 | $ 800 | |||
Restructuring costs incurred to date | $ 14,600 |