AUXLY CANNABIS GROUP INC. AUXLY CANNABIS GROUP INC.
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020
Dated August 13, 2021
The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared by and is the responsibility of the Company's management.
AUXLY CANNABIS GROUP INC.
Interim Condensed Consolidated Statements of Financial Position
Expressed in thousands of Canadian Dollars
Unaudited
As at: | June 30, | December 31, | ||
2021 | 2020 | |||
Assets | ||||
Current assets | $ | 31,735 | $ | 21,214 |
Cash and cash equivalents (Note 4) | ||||
Short-term investments | 286 | 286 | ||
Accounts receivables (Note 5) | 15,919 | 10,684 | ||
Biological assets (Note 6) | 582 | 419 | ||
Inventory (Note 7) | 50,727 | 43,797 | ||
Research contract costs | - | 2,931 | ||
Prepaid expenses | 1,633 | 873 | ||
Deposits (Note 12) | 10,249 | 7,444 | ||
Other receivables | 3,246 | 2,785 | ||
114,377 | 90,433 | |||
Non-current assets | 85,094 | 95,354 | ||
Property, plant and equipment, net (Note 8) | ||||
Intangible assets, net (Note 9) | 72,541 | 74,259 | ||
Goodwill (Note 9) | 23,641 | 28,595 | ||
Long-term investments (Note 10) | 19,927 | 5,026 | ||
Investment in joint venture (Note 11) | 80,891 | 82,079 | ||
Long-term deposits (Note 12) | 1,640 | 1,781 | ||
283,734 | 287,094 | |||
Assets held for sale (Note 25) | 1,400 | 1,436 | ||
Total assets | $ | 399,511 | $ | 378,963 |
Liabilities | ||||
Current liabilities | $ | 19,301 | ||
Accounts payable and accrued liabilities | $ | 27,241 | ||
Interest payable | 419 | 6,563 | ||
Lease liability (Note 13) | 1,261 | 1,473 | ||
Convertible debenture (Note 14) | 8,331 | - | ||
Short-term debt (Note 15) | 2,345 | 3,276 | ||
Deferred revenue | - | 5,659 | ||
31,657 | 44,212 | |||
Non-current liabilities | 8,788 | 9,410 | ||
Lease liability (Note 13) | ||||
Convertible debenture (Note 14) | 92,886 | 110,525 | ||
Deferred tax liability | 18,354 | 21,463 | ||
Other non-current liabilities | 1,060 | 1,024 | ||
121,088 | 142,422 | |||
Liabilities held for sale (Note 25) | 779 | 800 | ||
Total liabilities | 153,524 | 187,434 | ||
Equity | 432,147 | 394,574 | ||
Share capital (Note 16) | ||||
Reserves (Note 16) | 112,850 | 98,047 | ||
Accumulated other comprehensive loss | (18,138) | (21,952) | ||
Deficit | (276,565) | (274,729) | ||
Total equity attributable to shareholders of the Company | 250,294 | 195,940 | ||
Total equity attributable to non-controlling interest | (4,307) | (4,411) | ||
Total equity | 245,987 | 191,529 | ||
Total liabilities and equity | $ | 399,511 | $ | 378,963 |
Commitments and Contingencies (Note 20)
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
The interim condensed consolidated financial statements were approved by the Board of Directors on August 13, 2021 and were signed on its behalf by:
- Genevieve Young Genevieve Young
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AUXLY CANNABIS GROUP INC.
Interim Condensed Consolidated Statements of Income/(Loss) and
Comprehensive Income/(Loss)
Expressed in thousands of Canadian Dollars, except share and per share amounts Unaudited
For the periods ended: | Three months June 30, | Six months June 30, | ||||||
2021 | 2020 | 2021 | 2020 | |||||
CONTINUING OPERATIONS | ||||||||
Revenue | $ | 29,551 | $ | 41,703 | ||||
Revenue from sales of cannabis products | $ | 8,320 | $ | 18,787 | ||||
Other revenue | - | 66 | - | 70 | ||||
Excise taxes | (8,699) | (1,519) | (11,685) | (2,982) | ||||
Total net revenue | 20,852 | 6,867 | 30,018 | 15,875 | ||||
Costs of sales | 13,061 | 19,909 | ||||||
Costs of finished cannabis inventory sold | 5,029 | 10,120 | ||||||
Inventory impairment (Note 7) | 124 | 668 | 354 | 1,942 | ||||
Gross profit excluding fair value items | 7,667 | 1,170 | 9,755 | 3,813 | ||||
Unrealized fair value gain/(loss) on biological transformation (Note 6) | 315 | 201 | 570 | 150 | ||||
Realized fair value gain/(loss) on inventory | (1) | (15) | - | (195) | ||||
Gross profit | 7,981 | 1,356 | 10,325 | 3,768 | ||||
Expenses | 12,066 | 21,271 | ||||||
Selling, general, and administrative expenses (Note 21) | 13,608 | 26,350 | ||||||
Depreciation and amortization (Notes 8, 9) | 2,174 | 2,688 | 4,606 | 4,577 | ||||
Interest expense (Note 22) | 4,787 | 3,339 | 9,388 | 5,519 | ||||
Total expenses | 19,027 | 19,635 | 35,265 | 36,446 | ||||
Other income/(loss) | 75 | 191 | ||||||
Fair value gain/(loss) for financial instruments accounted under FVTPL (Note 10) | (4,521) | (4,636) | ||||||
Interest accretion and other income | 431 | 345 | 847 | 406 | ||||
Impairment of long-term assets (Note 8) | (11,366) | (4,506) | (11,366) | (4,506) | ||||
Gain/(loss) on settlement of assets and liabilities and other expenses | 16,995 | (2,020) | 21,063 | (186) | ||||
Share of loss on investment in joint venture (Note 11) | (2,494) | (996) | (2,953) | (1,781) | ||||
Foreign exchange gain/(loss) | (571) | (1,056) | (1,179) | 588 | ||||
Total other income/(loss) | 3,070 | (12,754) | 6,603 | (10,115) | ||||
Net loss before income tax | (7,976) | (31,033) | (18,337) | (42,793) | ||||
Income tax recovery | 4,291 | 567 | 4,330 | 567 | ||||
Net loss from continuing operations | $ | (3,685) | $ | (30,466) | $ | (14,007) | $ | (42,226) |
Net income/(loss) from discontinued operations (Note 26) | 12,334 | 1,258 | 12,156 | (173) | ||||
Net income/(loss) | $ | 8,649 | $ | (29,208) | $ | (1,851) | $ | (42,399) |
Net income/(loss) attributable to shareholders of the Company | $ | 8,658 | $ | (27,917) | $ | (1,836) | $ | (40,661) |
Net loss attributable to non-controlling interest | $ | (9) | $ | (1,291) | $ | (15) | $ | (1,738) |
Other comprehensive income/(loss) | ||||||||
Fair value gain/(loss) on fair value through other comprehensive income investments - | ||||||||
not subsequently reclassified to profit or loss (Note 10) | 280 | 1,874 | 3,336 | (702) | ||||
Currency translation adjustment - subsequently reclassified to profit or loss | 319 | 675 | 597 | (603) | ||||
Total comprehensive income/(loss) | $ | 9,248 | $ | (26,659) | $ | 2,082 | $ | (43,704) |
Total comprehensive income/(loss) attributable to shareholders of the Company | $ | 9,320 | $ | (25,503) | $ | 2,204 | $ | (41,845) |
Total comprehensive loss attributable to non-controlling interest | $ | (72) | (1,156) | $ | (122) | $ | (1,859) | |
Net income/(loss) per common share | $ | (0.00) | $ | (0.02) | ||||
From continuing operations | $ | (0.05) | $ | (0.06) | ||||
From discontinued operations | 0.02 | 0.00 | 0.02 | (0.00) | ||||
Net income/(loss) per common share - basic and diluted | $ | 0.01 | $ | (0.04) | $ | (0.00) | $ | (0.06) |
Weighted average number of shares outstanding | 762,652,783 | 738,481,243 | ||||||
Basic and diluted | 627,821,967 | 626,517,977 |
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
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AUXLY CANNABIS GROUP INC.
Interim Condensed Consolidated Statements of Cash Flows
Expressed in thousands of Canadian Dollars
Unaudited
For the periods ended: | Three months June 30, | Six months June 30, | ||||||
2021 | 2020 | 2021 | 2020 | |||||
Operating activities | ||||||||
Net loss for the period from continuing operations | $ | (3,685) | $ | (30,466) | $ | (14,007) | $ | (42,226) |
Items not affecting cash: | 124 | 354 | ||||||
Inventory impairment (Note 7) | 668 | 1,942 | ||||||
Realized fair value gain/(loss) on inventory | 1 | 15 | - | 195 | ||||
Unrealized fair value gain/(loss) on biological transformation (Note 6) | (315) | (201) | (570) | (150) | ||||
Depreciation and amortization (Notes 8, 9) | 2,620 | 2,262 | 5,158 | 4,187 | ||||
Share-based compensation (Note 21) | 960 | 1,282 | 1,166 | 2,699 | ||||
Interest expense (Note 22) | 4,353 | 1,909 | 8,539 | 3,649 | ||||
Interest income (Note 11) | (390) | - | (753) | - | ||||
Share of loss on investment in joint venture (Note 11) | 2,494 | 996 | 2,953 | 1,781 | ||||
Unrealized foreign exchange loss | 1,179 | - | 1,401 | - | ||||
Fair value gain/(loss) for financial instruments accounted under FVTPL (Note 10) | (75) | 4,521 | (191) | 4,636 | ||||
Income tax recovery | (4,291) | (567) | (4,330) | (567) | ||||
Impairment of long-term assets (Note 8) | 11,366 | 4,506 | 11,366 | 4,506 | ||||
Loss/(gain) on settlement of assets and liabilities and other expenses | (16,891) | 902 | (16,703) | 1,593 | ||||
Cash used in operating activities before net working capital | $ | (2,550) | $ | (14,173) | $ | (5,617) | $ | (17,755) |
Net change in non-cash working capital (Note 23) | (7,466) | 6,960 | (22,330) | (1,757) | ||||
Cash used in operating activities from continuing operations | $ | (10,016) | $ | (7,213) | $ | (27,947) | $ | (19,512) |
Net cash flows attributable to discontinued operations | 96 | 715 | (681) | 518 | ||||
Net cash used in operating activities | $ | (9,920) | $ | (6,498) | $ | (28,628) | $ | (18,994) |
Investing activities | $ | - | $ | 637 | ||||
Proceeds from sale of long-term investments (Note 10) | $ | 2,088 | $ | 3,721 | ||||
Proceeds on sale of subsidiary (Note 26) | 1,307 | - | 1,307 | - | ||||
Investment in joint venture | - | - | (900) | - | ||||
Purchase of capital assets (Note 8) | (4,061) | (4,486) | (5,268) | (12,095) | ||||
Cash used in investing activities from continuing operations | $ | (2,754) | $ | (2,398) | $ | (4,224) | $ | (8,374) |
Net cash flows attributable to discontinued operations | (2) | - | (3) | (104) | ||||
Net cash used in investing activities | $ | (2,756) | $ | (2,398) | $ | (4,227) | $ | (8,478) |
Financing activities | $ | - | - | |||||
Net proceeds from convertible debenture (Note 14) | $ | 8,648 | $ | 8,648 | ||||
Net proceeds from financings (Note 16) | 25,366 | - | 43,975 | - | ||||
Repayment of convertible debenture (Note 14) | - | - | - | (2,705) | ||||
Proceeds from warrants exercised | - | - | 1,084 | - | ||||
Proceeds from options exercised (Note 16) | 1 | 117 | 1 | 117 | ||||
Repayment of short-term borrowings | (1,026) | - | (931) | - | ||||
Repayment on long-term debt | - | - | - | (950) | ||||
Payment on lease liabilities | (281) | (391) | (556) | (935) | ||||
Cash provided by financing activities from continuing operations | $ | 24,060 | $ | 8,374 | $ | 43,573 | $ | 4,175 |
Net cash flows attributable to discontinued operations | (80) | (109) | (197) | (113) | ||||
Net cash provided by financing activities | $ | 23,980 | $ | 8,265 | $ | 43,376 | $ | 4,062 |
Cash provided by (used in) continuing operations | $ | 11,290 | $ | (1,237) | $ | 11,402 | $ | (23,711) |
Net cash flows attributable to discontinued operations | 14 | 606 | (881) | 301 | ||||
Increase/(decrease) in cash and cash equivalents | $ | 11,304 | $ | (631) | $ | 10,521 | $ | (23,410) |
Cash position, beginning of period | 20,431 | 21,355 | 21,214 | 44,134 | ||||
Cash and cash equivalents, end of period (Note 4) | $ | 31,735 | $ | 20,724 | $ | 31,735 | $ | 20,724 |
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
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AUXLY CANNABIS GROUP INC.
Interim Condensed Consolidated Statements of Changes in Equity
Expressed in thousands of Canadian Dollars
Unaudited
For the periods ended: | Three months June 30, | Six months June 30, | ||||||
2021 | 2020 | 2021 | 2020 | |||||
Share capital | ||||||||
Balance - beginning of period | $ | 410,491 | $ | 384,431 | $ | 394,574 | $ | 384,431 |
Shares issued on exercise of warrants | - | - | 1,084 | - | ||||
Shares issued on exercise of options | 2 | 117 | 2 | 117 | ||||
Shares issued as at-the-market offerings (Note 16) | 1,823 | - | 1,823 | - | ||||
Shares issued on financings, net of taxes (Note 16) | 18,999 | - | 33,452 | - | ||||
Shares issued as employee awards | 832 | - | 832 | - | ||||
Fair value transfer on exercise of warrants | - | - | 380 | - | ||||
Fair value transfer on exercise of options | - | 54 | - | 54 | ||||
Share capital - end of period | $ | 432,147 | $ | 384,602 | $ | 432,147 | $ | 384,602 |
Reserves | ||||||||
Convertible debentures | ||||||||
Balance - beginning of period | $ | 29,752 | $ | 29,150 | $ | 29,752 | $ | 29,150 |
Equity component of convertible debentures | - | 495 | - | 495 | ||||
Convertible debentures - end of period | $ | 29,752 | $ | 29,645 | $ | 29,752 | $ | 29,645 |
Warrants | ||||||||
Balance - beginning of period | $ | 37,579 | $ | 30,463 | $ | 33,803 | $ | 30,463 |
Warrants issued on financings (Note 16) | 5,276 | - | 9,432 | - | ||||
Fair value transfer to shares upon conversion | - | - | (380) | - | ||||
Warrants - end of period | $ | 42,855 | $ | 30,863 | $ | 42,855 | $ | 30,863 |
Contributed surplus | ||||||||
Balance - beginning of period | $ | 34,698 | $ | 31,648 | $ | 34,492 | $ | 30,231 |
Equity component of Imperial convertible debenture, net of taxes | 5,418 | - | 5,418 | - | ||||
Employee share options: | ||||||||
Share based compensation | 128 | 1,282 | 334 | 2,699 | ||||
Fair value transfer of exercise of options | (1) | (54) | (1) | (54) | ||||
Contributed surplus - end of period | $ | 40,243 | $ | 32,876 | $ | 40,243 | $ | 32,876 |
Reserves - end of period | $ | 112,850 | $ | 93,384 | $ | 112,850 | $ | 93,384 |
Accumulated other comprehensive loss | ||||||||
Balance - beginning of period | $ | (18,674) | $ | (24,316) | $ | (21,952) | $ | (20,718) |
Fair value changes in long-term investments (Note 10) | 280 | 1,874 | 3,336 | (702) | ||||
Currency translation adjustment | 256 | 540 | 478 | (482) | ||||
Accumulated other comprehensive loss - end of period | $ | (18,138) | $ | (21,902) | $ | (18,138) | $ | (21,902) |
Deficit | ||||||||
Attributable to the Company | ||||||||
Balance - beginning of period | $ | (285,223) | $ | (202,047) | $ | (274,729) | $ | (189,303) |
Net income/(loss) attributable to the Company | 8,658 | (27,917) | (1,836) | (40,661) | ||||
Ending deficit attributable to the Company | (276,565) | (229,964) | (276,565) | (229,964) | ||||
Attributable to non-controlling interests | ||||||||
Balance - beginning of period | $ | (4,361) | $ | (3,052) | $ | (4,411) | $ | (2,349) |
Currency translation adjustment | 63 | 135 | 119 | (121) | ||||
Net loss attributable to non-controlling interests | (9) | (1,291) | (15) | (1,738) | ||||
Ending deficit attributable to non-controllable interests | (4,307) | (4,208) | (4,307) | (4,208) | ||||
Deficit - end of period | $ | (280,872) | $ | (234,172) | $ | (280,872) | $ | (234,172) |
Shareholders' equity - end of period | $ | 245,987 | $ | 221,912 | $ | 245,987 | $ | 221,912 |
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
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Auxly Cannabis Group Inc. published this content on 03 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 March 2022 15:50:02 UTC.
