NOVA
C A N N A B I S I N C .
(FORMERLY YSS CORP.)
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Three and Nine Months Ended September 30, 2021 and 2020
(Unaudited, expressed in thousands of Canadian dollars)
Nova Cannabis Inc.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited, in thousands of Canadian dollars)
As at | As at | ||
Note | September 30, | December 31, | |
2021 | 2020 | ||
$ | $ | ||
Assets | 15,464 | 1,202 | |
Current assets: | |||
Cash | 5 | ||
Restricted cash | - | 235 | |
Receivables | 420 | 273 | |
Inventory | 6,630 | 2,558 | |
Prepaid expenses and deposits | 3,802 | 2,234 | |
Deposits | 7 | 26,316 | 6,502 |
Intangible assets | 29,115 | 17,273 | |
Property and equipment | 8 | 968 | 368 |
Goodwill | 47,913 | 32,264 | |
Right‐of‐use assets | 3b | 440 | 429 |
19,270 | - | ||
Liabilities | 17 | 124,022 | 56,836 |
Current liabilities: | 8,067 | 3,194 | |
Accounts payable and accrued liabilities | |||
Revolving credit facility | 6, 17 | - | 22 |
Redemption obligation | 5 | - | 1,128 |
Current portion of lease liabilities | 8 | 5,146 | 3,509 |
Warrant liabilities | 11 | 172 | - |
8 | 13,385 | 7,853 | |
Lease liabilities | 46,741 | 31,922 | |
Shareholders' equity: | 10 | 60,126 | 39,775 |
Equity attributable to shareholders | 97,618 | 37,273 | |
Contributed surplus | 1,974 | - | |
Deficit | (35,696) | (20,212) | |
63,896 | 17,061 | ||
Commitments | 20 | 124,022 | 56,836 |
Subsequent event | 21 |
The accompanying notes are an integral part of the condensed interim consolidated financial statements.
Nova Cannabis Inc. | Third Quarter Condensed Interim Consolidated Financial Statements | 1 |
Nova Cannabis Inc.
Condensed Interim Consolidated Statements of Changes in Equity
Nine Months Ended September 30, 2021 and 2020
(Unaudited, in thousands of Canadian dollars)
Partner's | Contributed | |||
capital | Deficit | Total | ||
contribution | surplus | |||
$ | $ | $ | $ | |
Opening balance - as at January 1, 2020 | 13,500 | - | (18,139) | (4,639) |
Net earnings and comprehensive income for the period | - | - | 1,098 | 1,098 |
Issuance of partnership units | 23,773 | - | - | 23,773 |
Balance - as at September 30, 2020 | 37,273 | - | (17,041) | 20,232 |
Share capital | Contributed | Deficit | Total | |
(note 10) | surplus | |||
$ | $ | $ | $ | |
Opening balance - as at January 1, 2021 | 37,273 | - | (20,212) | 17,061 |
Loss and comprehensive loss for the period | - | - | (15,484) | (15,484) |
Business combination (note 3b) | 22,750 | 200 | - | 22,950 |
Issuance of common shares | 40,057 | - | - | 40,057 |
Share issuance costs (note 3d) | (3,594) | 653 | - | (2,941) |
Warrants transferred to contributed surplus (note 11) | - | 1,121 | - | 1,121 |
Common shares issued for asset acquisition (note 4) | 1,132 | - | - | 1,132 |
Balance - as at September 30, 2021 | 97,618 | 1,974 | (35,696) | 63,896 |
The accompanying notes are an integral part of the condensed interim consolidated financial statements.
Nova Cannabis Inc. | Third Quarter Condensed Interim Consolidated Financial Statements | 2 |
Nova Cannabis Inc.
Condensed Interim Consolidated Statements of Profit and Loss and Comprehensive Income and Loss Three and Nine Months Ended September 30, 2021 and 2020
(Unaudited, in thousands of Canadian dollars except for per common share data)
Three months ended | Nine months ended | ||||||
September 30, | September 30, | ||||||
Note | 2021 | 2020 | 2021 | 2020 | |||
$ | $ | $ | $ | ||||
Sales | 38,655 | 15,978 | 86,738 | 46,049 | |||
Cost of sales | 32,136 | 10,627 | 70,260 | 30,571 | |||
Gross margin | 14 | 6,519 | 5,351 | 16,478 | 15,478 | ||
Selling and distribution expenses | 5,677 | 2,643 | 13,784 | 8,439 | |||
Administrative expenses | 15 | 1,552 | 147 | 5,218 | 442 | ||
Management fee | 17 | 312 | 500 | 1,125 | 1,500 | ||
Operating (loss) profit before depreciation, | (1,022) | 2,061 | (3,649) | 5,097 | |||
remeasurements and provisions | 7, 8 | ||||||
Depreciation and amortization | 2,745 | 1,326 | 7,561 | 3,758 | |||
Impairment, lease remeasurements and other costs | 16 | 1,282 | (1,114) | 2,086 | (1,161) | ||
Operating (loss) profit | (5,049) | 1,849 | (13,296) | 2,500 | |||
Finance costs | 896 | 476 | 2,210 | 1,402 | |||
Net loss (gain) on fair value adjustments | 292 | - | (22) | - | |||
Net (loss) earnings and comprehensive (loss) | (6,237) | 1,373 | (15,484) | 1,098 | |||
income | |||||||
Basic and diluted (loss) earnings per share | 13 | (0.11) | 0.10 | (0.31) | 0.08 |
The accompanying notes are an integral part of the condensed interim consolidated financial statements.
Nova Cannabis Inc. | Third Quarter Condensed Interim Consolidated Financial Statements | 3 |
Nova Cannabis Inc.
Condensed Interim Consolidated Statements of Cash Flows
Three and Nine Months Ended September 30, 2021 and 2020
(Unaudited, in thousands of Canadian dollars)
Three months ended | Nine months ended | ||||||
September 30, | September 30, | ||||||
Note | 2021 | 2020 | 2021 | 2020 | |||
Cash provided by (used in) | $ | $ | $ | $ | |||
(6,237) | 1,373 | (15,484) | 1,098 | ||||
Operating activities: | |||||||
(Loss) earnings for the period | |||||||
Adjustments to reconcile (loss) earnings to net | |||||||
cash flows from operating activities: | 7 | 1,127 | 494 | 3,311 | 1,410 | ||
Depreciation of property and equipment | |||||||
Depreciation of right-of-use assets | 8 | 1,581 | 832 | 4,076 | 2,333 | ||
Acquisition related expense | 4 | 1,175 | - | 1,175 | - | ||
Loss on disposal of assets | 6a | 37 | - | 174 | 15 | ||
Non-cash interest on revolving credit facility | - | - | 39 | - | |||
Lease remeasurements | 8 | 107 | (1,114) | 54 | (1,161) | ||
Impairment of property and equipment | 7 | - | - | 607 | - | ||
Impairment of right-of-use assets | 8 | - | - | 250 | - | ||
Net loss (gain) on fair value adjustments | 292 | - | (22) | - | |||
Cash (used in) provided by operating activities | (1,918) | 1,585 | (5,820) | 3,695 | |||
before changes in non-cash working capital | 18 | ||||||
Net change in non-cash working capital items | 1,073 | 1,118 | (3,563) | 6,416 | |||
(845) | 2,703 | (9,383) | 10,111 | ||||
Investing activities: | (6,891) | (792) | (8,728) | (6,720) | |||
Purchase of property and equipment | |||||||
Purchase of intangible assets | (11) | - | (11) | - | |||
Proceeds on disposal of property and equipment | 3b | - | 28 | - | 28 | ||
Business combination, cash acquired | - | - | 406 | - | |||
Redemption obligation payment | 5 | - | - | (1,084) | (823) | ||
(6,902) | (764) | (9,417) | (7,515) | ||||
Financing activities: | 8 | (1,696) | (865) | (4,028) | (2,321) | ||
Principal portion of lease payments | |||||||
Proceeds from revolving credit facility | 6a | - | - | 3,335 | - | ||
Repayments of revolving credit facility | - | - | (3,396) | - | |||
Repayments of long-term debt | 6b | - | - | (200) | - | ||
Issuance of common shares, net of cash share | - | - | 37,116 | - | |||
issuance costs | |||||||
(1,696) | (865) | 32,827 | (2,321) | ||||
(Decrease) increase in cash and restricted cash | (9,443) | 1,074 | 14,027 | 275 | |||
Cash and restricted cash - Beginning of period | |||||||
Cash and restricted cash - End of period | 24,907 | 1,386 | 1,437 | 2,185 | |||
Deduct: Restricted cash - End of period | 15,464 | 2,460 | 15,464 | 2,460 | |||
- | (392) | - | (392) | ||||
Cash - End of period | 15,464 | 2,068 | 15,464 | 2,068 | |||
The accompanying notes are an integral part of the condensed interim consolidated financial statements.
Nova Cannabis Inc. | Third Quarter Condensed Interim Consolidated Financial Statements | 4 |
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Nova Cannabis Inc. published this content on 18 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 November 2021 17:22:11 UTC.