Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) (“Cronos Group”
or the “Company”), today announces its 2021 Second Quarter business
results.
“This quarter, Cronos Group continued to bring
high-quality and insight-driven products to market. I am
particularly proud of the Spinach™ brand gummy innovation launched
this quarter into the Canadian adult-use market, SOURZ by Spinach™,
which has quickly jumped to be one of the most desirable products
in the edibles category. In the U.S., we officially re-launched
PEACE+™ in the direct-to-consumer channel, which rounds out our
different pricing tiers for the U.S. hemp-derived CBD market.
Having brands across price points and usage occasions is critical
to meeting consumer needs in the CBD category,” said Kurt Schmidt,
President and CEO, Cronos Group.
“Our U.S. growth strategy focuses on delivering
long-term shareholder value by assembling a best-in-class brand and
intellectual property portfolio and positioning to deploy our
products in the U.S. market through investments and opportunities
with companies that share our vision and commitment to responsibly
distributing disruptive cannabinoid products that improve people’s
lives. In the second quarter of 2021, we were able to lock in a
component of that strategy as we made a strategic investment in
PharmaCann, a leading vertically integrated U.S. cannabis company.
We look forward to capitalizing on opportunities in the U.S. that
we expect will strengthen our ability to compete in this emerging
market.”
Financial Results
| (in thousands of U.S.
dollars) |
|
Three months ended June 30, |
|
Change |
|
Six months ended June 30, |
|
Change |
| |
|
2021 |
|
2020 |
|
$ |
|
% |
|
2021 |
|
2020 |
|
$ |
|
% |
| Net revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
2,227 |
|
|
|
$ |
2,174 |
|
|
|
$ |
53 |
|
|
|
2 |
|
% |
|
$ |
4,668 |
|
|
|
$ |
4,350 |
|
|
|
$ |
318 |
|
|
|
7 |
|
% |
|
Rest of World |
|
13,395 |
|
|
|
7,709 |
|
|
|
5,686 |
|
|
|
74 |
|
% |
|
23,565 |
|
|
|
13,965 |
|
|
|
9,600 |
|
|
|
69 |
|
% |
| Consolidated net revenue |
|
15,622 |
|
|
|
9,883 |
|
|
|
5,739 |
|
|
|
58 |
|
% |
|
28,233 |
|
|
|
18,315 |
|
|
|
9,918 |
|
|
|
54 |
|
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross loss |
|
$ |
(15,784 |
) |
|
|
$ |
(2,922 |
) |
|
|
$ |
(12,862 |
) |
|
|
440 |
|
% |
|
$ |
(18,747 |
) |
|
|
$ |
(9,398 |
) |
|
|
$ |
(9,349 |
) |
|
|
99 |
|
% |
| Gross margin |
|
(101 |
) |
% |
|
(30 |
) |
% |
|
N/A |
|
(71 |
) |
pp |
|
(66 |
) |
% |
|
(51 |
) |
% |
|
N/A |
|
(15 |
) |
pp |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA (i) |
|
$ |
(49,759 |
) |
|
|
$ |
(26,986 |
) |
|
|
$ |
(22,773 |
) |
|
|
84 |
|
% |
|
$ |
(86,333 |
) |
|
|
$ |
(64,041 |
) |
|
|
$ |
(22,292 |
) |
|
|
35 |
|
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other
Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents
(ii) |
|
$ |
895,181 |
|
|
|
$ |
1,109,700 |
|
|
|
$ |
(214,519 |
) |
|
|
(19 |
) |
% |
|
|
|
|
|
|
|
|
| Short-term investments
(ii) |
|
201,699 |
|
|
|
213,614 |
|
|
|
(11,915 |
) |
|
|
(6 |
) |
% |
|
|
|
|
|
|
|
|
| Capital expenditures |
|
2,118 |
|
|
|
8,582 |
|
|
|
(6,464 |
) |
|
|
(75 |
) |
% |
|
9,190 |
|
|
|
16,098 |
|
|
|
(6,908 |
) |
|
|
(43 |
) |
% |
(i) See “Non-GAAP Measures” for
more information, including a reconciliation of adjusted earnings
(loss) before interest, taxes, depreciation and amortization
(“Adjusted EBITDA”)(ii) Dollar amounts are as of the
last day of the period indicated
Second Quarter 2021
- Net revenue of $15.6 million in Q2
2021 increased by $5.7 million from Q2 2020. The increase
year-over-year was primarily driven by continued growth in the
adult-use Canadian cannabis market and increased sales in the
Israeli medical cannabis market.
- Gross loss of $15.8 million in Q2
2021 increased by $12.9 million from Q2 2020. The increase in
losses year-over-year was primarily driven by an increase in
inventory write-downs in the ROW segment, which totaled $12.0
million in Q2 2021, representing an increase of $8.9 million from
Q2 2020, the impact of strategic price reductions on various
adult-use cannabis products in Canada taken in the second half of
2020, as well as start-up costs associated with new product
development in the Rest of World (“ROW”) segment.
- Adjusted EBITDA loss of $49.8
million in Q2 2021 increased by $22.8 million from Q2 2020. The
increase in losses year-over-year was primarily driven by an
increase in gross loss as described above, an increase in sales and
marketing costs due to brand development in the U.S. segment, and
an increase in research and development (“R&D”) costs driven by
increased spending on product development and developing
cannabinoid intellectual property in the ROW segment.
- Capital expenditures of $2.1
million in Q2 2021 decreased by $6.5 million from Q2 2020. The
decrease year-over-year was primarily driven by a reduction in
construction costs in the ROW segment and a decrease in costs
related to the Company’s enterprise resource planning system.
Business Updates
Transactions
In June 2021, Cronos Group announced a strategic
investment (the “PharmaCann Investment”) in PharmaCann Inc.
(“PharmaCann”), a leading vertically integrated U.S. cannabis
company. A wholly owned subsidiary of Cronos Group purchased an
option (the “PharmaCann Option”) to acquire an approximately 10.5%
ownership stake in PharmaCann on a fully-diluted basis for a total
consideration of approximately $110.4 million. PharmaCann has a
broad geographic footprint in the U.S. and has built an efficient,
effective and scalable operating model, including six production
facilities and 24 dispensaries operating under the Verilife™ brand
across the following six limited license states: New York,
Illinois, Ohio, Maryland, Pennsylvania, and Massachusetts.
PharmaCann continues to invest in its manufacturing infrastructure
and brand development to capitalize on the significant consumer
retail and business-to-business wholesale opportunities. Following
the exercise of the PharmaCann Option (which will be based upon
various factors, including the status of U.S. federal cannabis
legalization), Cronos Group and PharmaCann will enter into
commercial agreements that would permit each party to offer its
products through either party’s distribution channels.
Brand and Product Portfolio
In June 2021, Cronos Group launched SOURZ by
Spinach™, an exciting new line of cannabis gummies with bold and
unique dual flavor combinations, into the Canadian adult-use
market. SOURZ by Spinach™ delivers bold fruit flavors in a
distinctive “S” shape with a proprietary coating designed to
provide a sour and sweet flavor profile, differentiating the
product and elevating the consumer experience. SOURZ by Spinach™
has quickly risen to being one of the top performing brands in the
edibles category. According to Hifyre™ data, SOURZ by Spinach™ has
achieved a double-digit market share in the edibles category during
the July and August-to-date period. OCS Data for Ontario sales to
retailers reports all three of the SOURZ by Spinach™ stock keeping
units ("SKU") ranking in the top-10 of the edible category, during
the 4 weeks ending August 1, 2021.
In June 2021, Cronos Group launched Spinach™
DABZ, a new line of cannabis concentrates into the Canadian
adult-use market. Spinach™ DABZ are 100% cannabis-derived with no
color remediation or additives to preserve terpenes and full
spectrum cannabinoids. Broadening the reach of Cronos Group’s
Spinach™ brand into new and emerging categories with differentiated
products will continue to be the key driver of innovation
initiatives.
During the second quarter of 2021, the Spinach™
brand also launched a 28-gram format for Spinach™ flower, Spinach™
Nuggetz, and a new flower SKU, Spinach™ GMO Cookies, in select
markets in Canada.
In June 2021, the Company officially re-launched
PEACE+™, Cronos Group’s U.S. hemp-derived CBD offering that is
positioned in the mainstream market through its direct-to-consumer
website, peaceplus.com. PEACE+™’s initial product portfolio
consists of four tinctures. The Company intends to expand the
product portfolio over time with innovative U.S. hemp-derived CBD
products.
Subsequent to the end of the second quarter of
2021, in July 2021, Happy Dance™ launched a new facial skin care
product, Look Alive CBD Face Moisturizer. This moisturizer has a
whipped, light texture and is packed with hydrating ingredients
such as avocado oil, hyaluronic acid and high-quality U.S.
hemp-derived CBD. The product is now available online to U.S.
consumers through the brand’s direct-to-consumer website,
doahappydance.com, and online at ULTA.com and is expected to become
available in ULTA Beauty™ stores throughout the U.S. in the coming
weeks.
Intellectual Property
Initiatives
In June 2021, Cronos Group and Ginkgo Bioworks,
Inc. (“Ginkgo”) announced an amended collaboration and license
agreement that will enable the companies to accelerate the
commercialization of cultured cannabinoids at scale. The amended
agreement follows the receipt of Cronos Fermentation’s processing
license in April 2021, and most recently the receipt of its license
issued by the Canada Revenue Agency. With the amended agreement and
both licenses in hand, Cronos Fermentation commenced
commercial-scale production of cannabigerol (“CBG”) in June 2021.
Cronos Group is prioritizing rare cannabinoids, such as CBG, and
plans to sequence commercial production and subsequent product
launches based on this approach. Cronos Group expects that the
final productivity target for CBG will be achieved prior to
September 2021, as previously announced.
Appointments
Kendrick Ashton Jr. was elected to Cronos
Group’s Board of Directors at the Annual Meeting of Shareholders
held on June 25, 2021. Mr. Ashton is the Co-Founder and Co-Chief
Executive Officer of The St. James, a leading developer and
operator of performance, wellness and lifestyle brands, experiences
and destinations. Prior to founding The St. James in 2014, Mr.
Ashton was a founding member and Managing Director of Perella
Weinberg Partners, a boutique financial services firm founded in
2006. Prior to joining Perella Weinberg Partners, Mr. Ashton was an
investment banker at Goldman, Sachs & Co. and gained legal
experience at Cravath, Swaine & Moore LLP and Wachtell, Lipton,
Rosen & Katz. Mr. Ashton is a member of the Board of Trustees
of the Colonial Williamsburg Foundation, the Board of Trustees of
the National Urban League, the Board of Directors of Archbishop
John Carroll High School and the Board of Directors of Bellwether
Education Partners and is an emeritus member of the Board of
Visitors and Foundation Board of the College of William &
Mary.
In April 2021, Thomas Cohn joined Cronos Group
as Head of Regulatory and Product. Mr. Cohn joined Cronos Group
from The Avon Company, where he served as General Counsel and
Corporate Secretary. Mr. Cohn also served as Deputy General
Counsel, Regulatory at NBTY, Inc., a leading vertically integrated
manufacturer, marketer and distributor of nutritional supplements
with global operations. Prior to his time at NBTY, Inc., Mr. Cohn
served in various roles at the Federal Trade Commission (“FTC”)
from 1991 to 2008, including as Director and Assistant Director of
its Northeast Region, where he was responsible for managing
antitrust and consumer protection investigations and law
enforcement actions, as well as local and regional outreach efforts
to educate consumers, businesses, and law enforcement agencies on
fraud identification and avoidance, and how to comply with
antitrust and consumer protection laws enforced by the FTC.
In July 2021, Anthony Parisi joined Cronos Group
as Global Head of Audit, a newly formed role for the Company. Mr.
Parisi joins Cronos Group with over 20 years of audit experience,
most recently serving as Vice President of Global Audit and Risk
Management for Reliance Worldwide Corporation, an ASX listed
company.
In June 2021, Carlos Cortez joined Cronos Group
as Vice President & Controller, a role which includes serving
as the Company’s principal accounting officer. Mr. Cortez joins
Cronos Group with over 18 years of experience, most recently
serving as Corporate Controller of SharpSpring, Inc., a publicly
traded cloud-based marketing technology company. Prior to his time
at SharpSpring, Inc., Mr. Cortez was the Senior Finance Director –
Record to Report for Discovery, Inc., a publicly traded global
media company, from August 2019 until December 2020. Prior to his
time at Discovery, Inc., Mr. Cortez spent five years as Corporate
Controller for Malibu Boats, Inc., a publicly traded manufacturer
of recreational powerboats.
Rest of World Results
Cronos Group’s Rest of World reporting segment
includes results of the Company’s operations for all markets
outside of the U.S.
| (in thousands of U.S.
dollars) |
|
Three months ended June 30, |
|
Change |
|
Six months ended June 30, |
|
Change |
| |
|
2021 |
|
2020 |
|
$ |
|
% |
|
2021 |
|
2020 |
|
$ |
|
% |
|
Cannabis flower |
|
$ |
11,597 |
|
|
|
$ |
5,674 |
|
|
|
$ |
5,923 |
|
|
|
104 |
|
% |
|
$ |
21,031 |
|
|
|
$ |
8,415 |
|
|
|
$ |
12,616 |
|
|
|
150 |
|
% |
|
Cannabis extracts |
|
1,531 |
|
|
|
1,917 |
|
|
|
(386 |
) |
|
|
(20 |
) |
% |
|
2,234 |
|
|
|
5,317 |
|
|
|
(3,083 |
) |
|
|
(58 |
) |
% |
|
Other |
|
267 |
|
|
|
118 |
|
|
|
149 |
|
|
|
126 |
|
% |
|
300 |
|
|
|
233 |
|
|
|
67 |
|
|
|
29 |
|
% |
| Net revenue |
|
13,395 |
|
|
|
7,709 |
|
|
|
5,686 |
|
|
|
74 |
|
% |
|
23,565 |
|
|
|
13,965 |
|
|
|
9,600 |
|
|
|
69 |
|
% |
| |
|
|
|
|
|
|
|
|
| Gross loss |
|
$ |
(16,428 |
) |
|
|
$ |
(3,509 |
) |
|
|
$ |
(12,919 |
) |
|
|
368 |
|
% |
|
$ |
(20,567 |
) |
|
|
$ |
(11,067 |
) |
|
|
$ |
(9,500 |
) |
|
|
86 |
|
% |
| Gross margin |
|
(123 |
) |
% |
|
(46 |
) |
% |
|
N/A |
|
(77 |
) |
pp |
|
(87 |
) |
% |
|
(79 |
) |
% |
|
N/A |
|
(8 |
) |
pp |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA (i) |
|
$ |
(32,605 |
) |
|
|
$ |
(18,618 |
) |
|
|
$ |
(13,987 |
) |
|
|
75 |
|
% |
|
$ |
(54,789 |
) |
|
|
$ |
(47,628 |
) |
|
|
$ |
(7,161 |
) |
|
|
15 |
|
% |
(i) See “Non-GAAP Measures” for
more information, including a reconciliation of Adjusted
EBITDA
Second Quarter 2021
- Net revenue of $13.4 million in Q2
2021 increased by $5.7 million from Q2 2020. The increase
year-over-year was primarily driven by continued growth in the
adult-use cannabis flower market in Canada and sales in the Israeli
medical cannabis market.
- Gross loss of $16.4 million in Q2
2021 increased by $12.9 million from Q2 2020. The increase in
losses year-over-year was primarily driven by an increase in
inventory write-downs which totaled $12.0 million in Q2 2021
representing an increase of $8.9 million from Q2 2020, the impact
of strategic price reductions on various adult-use cannabis
products in Canada taken in the second half of 2020, and start-up
costs associated with new product development.
- Adjusted EBITDA loss of $32.6
million in Q2 2021 increased by $14.0 million from Q2 2020. The
increase in losses year-over-year was primarily driven by an
increase in gross loss as described above, and an increase in
R&D costs driven by increased spending on product development
and developing cannabinoid intellectual property.
United States Results
Cronos Group’s U.S. reporting segment includes results of the
Company’s operations for all brands and products in the U.S.
| (in thousands of U.S.
dollars) |
|
Three months ended June 30, |
|
Change |
|
Six months ended June 30, |
|
Change |
| |
|
2021 |
|
2020 |
|
$ |
|
% |
|
2021 |
|
2020 |
|
$ |
|
% |
|
Net revenue |
|
$ |
2,227 |
|
|
|
$ |
2,174 |
|
|
|
$ |
53 |
|
|
|
2 |
% |
|
$ |
4,668 |
|
|
|
$ |
4,350 |
|
|
|
$ |
318 |
|
|
|
7 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross profit |
|
$ |
644 |
|
|
|
$ |
587 |
|
|
|
$ |
57 |
|
|
|
10 |
% |
|
$ |
1,820 |
|
|
|
$ |
1,669 |
|
|
|
$ |
151 |
|
|
|
9 |
% |
| Gross margin |
|
29 |
|
% |
|
27 |
|
% |
|
N/A |
|
2 |
pp |
|
39 |
|
% |
|
38 |
|
% |
|
N/A |
|
1 |
pp |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA (i) |
|
$ |
(10,711 |
) |
|
|
$ |
(4,785 |
) |
|
|
$ |
(5,926 |
) |
|
|
124 |
% |
|
$ |
(20,221 |
) |
|
|
$ |
(10,567 |
) |
|
|
$ |
(9,654 |
) |
|
|
91 |
% |
(i) See “Non-GAAP Measures” for
more information, including a reconciliation of Adjusted
EBITDA.
Second Quarter 2021
- Net revenue of $2.2 million in Q2
2021 essentially unchanged from Q2 2020.
- Gross profit of $0.6 million in Q2
2021 essentially unchanged from Q2 2020.
- Adjusted EBITDA loss of
$10.7 million in Q2 2021 increased by $5.9 million from Q2
2020. The increase in losses year-over-year was primarily driven by
an increase in sales and marketing costs related to brand
development.
Conference Call
The Company will host a conference call and live
audio webcast on Friday, August 6, 2021, at 8:30 a.m. EDT to
discuss 2021 Second Quarter business results. The call will last
approximately one hour. An audio replay of the call will be
archived on the Company’s website for replay. Instructions for the
conference call are provided below:
- Live audio webcast:
https://ir.thecronosgroup.com/events-presentations
- Toll-Free from the U.S. and Canada dial-in: (866) 795-2258
- International dial-in: (409) 937-8902
- Conference ID: 9738856
About Cronos Group
Cronos Group is an innovative global cannabinoid
company with international production and distribution across five
continents. Cronos Group is committed to building disruptive
intellectual property by advancing cannabis research, technology
and product development. With a passion to responsibly elevate the
consumer experience, Cronos Group is building an iconic brand
portfolio. Cronos Group’s portfolio includes PEACE NATURALS™, a
global wellness platform, two adult-use brands, COVE™ and Spinach™,
and three U.S. hemp-derived CBD brands, Lord Jones™, Happy Dance™
and PEACE+™. For more information about Cronos Group and its
brands, please visit: thecronosgroup.com.
Forward-looking Statements
This press release may contain information that
may constitute forward-looking information and forward-looking
statements within the meaning of applicable securities laws
(collectively, “Forward-Looking Statements”), which are based upon
our current internal expectations, estimates, projections,
assumptions and beliefs. All information that is not clearly
historical in nature may constitute Forward-Looking Statements. In
some cases, Forward-Looking Statements can be identified by the use
of forward-looking terminology such as “expect”, “likely”, “may”,
“will”, “should”, “intend”, “anticipate”, “potential”, “proposed”,
“estimate” and other similar words, expressions and phrases,
including negative and grammatical variations thereof, or
statements that certain events or conditions “may” or “will”
happen, or by discussion of strategy. Forward-Looking Statements
include estimates, plans, expectations, opinions, forecasts,
projections, targets, guidance or other statements that are not
statements of historical fact.
Forward-Looking Statements include, but are not
limited to, statements with respect to:
- the uncertainties associated with
the COVID-19 pandemic, including our ability, and the abilities of
our joint ventures and our suppliers and distributors, to
effectively deal with the restrictions, limitations and health
issues presented by the COVID-19 pandemic, the ability to continue
our production, distribution and sale of our products, and demand
for and the use of our products by consumers;
- laws and regulations and any
amendments thereto applicable to our business and the impact
thereof, including uncertainty regarding the application of United
States (“U.S.”) state and federal law to U.S. hemp (including CBD)
products and the scope of any regulations by the U.S. Food and Drug
Administration, the U.S. Drug Enforcement Administration, the U.S.
Federal Trade Commission, the U.S. Patent and Trademark Office (the
“PTO”) and any state equivalent regulatory agencies over U.S. hemp
(including CBD) products;
- the laws and regulations and any
amendments thereto relating to the U.S. hemp industry in the U.S.,
including the promulgation of regulations for the U.S. hemp
industry by the U.S. Department of Agriculture and relevant state
regulatory authorities;
- the grant, renewal and impact of
any license or supplemental license to conduct activities with
cannabis or any amendments thereof;
- our international activities and
joint venture interests, including required regulatory approvals
and licensing, anticipated costs and timing, and expected
impact;
- our ability to successfully create
and launch brands and further create, launch and scale U.S.
hemp-derived consumer products, and cannabis products;
- the benefits, viability, safety,
efficacy, dosing and social acceptance of cannabis including CBD
and other cannabinoids;
- expectations regarding the
implementation and effectiveness of key personnel changes;
- the anticipated benefits and impact
of the Altria Group Inc.’s investment in the Company (the “Altria
Investment”), pursuant to a subscription agreement dated December
7, 2018;
- the potential exercise of one
warrant of the Company included as part of the Altria Investment,
pre-emptive rights and/or top-up rights in connection with the
Altria Investment, including proceeds to us that may result
therefrom;
- expectations regarding the use of
proceeds of equity financings, including the proceeds from the
Altria Investment;
- the legalization of the use of
cannabis for medical or adult-use in jurisdictions outside of
Canada, the related timing and impact thereof and our intentions to
participate in such markets, if and when such use is
legalized;
- expectations regarding the
potential success of, and the costs and benefits associated with,
our joint ventures, strategic alliances and equity investments,
including the strategic partnership with Ginkgo;
- our ability to execute on our
strategy and the anticipated benefits of such strategy;
- expectations of the amount or
frequency of impairment losses, including as a result of the
write-down of intangible assets, including goodwill;
- the ongoing impact of the
legalization of additional cannabis product types and forms for
adult-use in Canada, including federal, provincial, territorial and
municipal regulations pertaining thereto, the related timing and
impact thereof and our intentions to participate in such
markets;
- the future performance of our
business and operations;
- our competitive advantages and
business strategies;
- the competitive conditions of the
industry;
- the expected growth in the number
of customers using our products;
- our ability or plans to identify,
develop, commercialize or expand our technology and R&D
initiatives in cannabinoids, or the success thereof;
- expectations regarding acquisitions
and dispositions and the anticipated benefits therefrom, including
the proposed sale of our Original B.C. Ltd. (“OGBC”) production
facility;
- uncertainties as to our ability to
exercise the PharmaCann Option (as defined herein) in the near term
or the future or in full or in part, including the uncertainties as
to the status and future development of federal legalization of
cannabis in the U.S. and our ability to realize the anticipated
benefits of the transaction with PharmaCann (as defined
herein);
- expectations regarding revenues,
expenses and anticipated cash needs;
- expectations regarding cash flow,
liquidity and sources of funding;
- expectations regarding capital
expenditures;
- the expansion of our production and
manufacturing, the costs and timing associated therewith and the
receipt of applicable production and sale licenses;
- the expected growth in our growing,
production and supply chain capacities;
- expectations regarding the
resolution of litigation and other legal and regulatory
proceedings, reviews and investigations;
- expectations with respect to future
production costs;
- expectations with respect to future
sales and distribution channels and networks;
- the expected methods to be used to
distribute and sell our products;
- the anticipated future gross
margins of our operations;
- accounting standards and
estimates;
- our ability to timely and
effectively remediate any material weaknesses in our internal
control over financial reporting; and
- expectations regarding the costs
and benefits associated with our contracts and agreements with
third parties, including under our third-party supply and
manufacturing agreements.
Certain of the Forward-Looking Statements
contained herein concerning the industries in which we conduct our
business are based on estimates prepared by us using data from
publicly available governmental sources, market research, industry
analysis and on assumptions based on data and knowledge of these
industries, which we believe to be reasonable. However, although
generally indicative of relative market positions, market shares
and performance characteristics, such data is inherently imprecise.
The industries in which we conduct our business involve risks and
uncertainties that are subject to change based on various factors,
which are described further below.
The Forward-Looking Statements contained herein
are based upon certain material assumptions that were applied in
drawing a conclusion or making a forecast or projection, including:
(i) our ability, and the abilities of our joint ventures and our
suppliers and distributors, to effectively deal with the
restrictions, limitations and health issues presented by the
COVID-19 pandemic and the ability to continue our production,
distribution and sale of our products and customer demand for and
use of our products; (ii) management’s perceptions of historical
trends, current conditions and expected future developments; (iii)
our ability to generate cash flow from operations; (iv) general
economic, financial market, regulatory and political conditions in
which we operate; (v) the production and manufacturing capabilities
and output from our facilities and our joint ventures, strategic
alliances and equity investments; (vi) consumer interest in our
products; (vii) competition; (viii) anticipated and unanticipated
costs; (ix) government regulation of our activities and products
including but not limited to the areas of taxation and
environmental protection; (x) the timely receipt of any required
regulatory authorizations, approvals, consents, permits and/or
licenses; (xi) our ability to obtain qualified staff, equipment and
services in a timely and cost-efficient manner; (xii) our ability
to conduct operations in a safe, efficient and effective manner;
(xiii) our ability to realize anticipated benefits, synergies or
generate revenue, profits or value from our recent acquisitions
into our existing operations; (xiv) our ability to complete planned
dispositions, including the sale of OGBC, and, if completed, obtain
our anticipated sales price; (xv) our ability to exercise the
PharmaCann Option and realize the anticipated benefits of the
transaction with PharmaCann; and (xvi) other considerations that
management believes to be appropriate in the circumstances. While
our management considers these assumptions to be reasonable based
on information currently available to management, there is no
assurance that such expectations will prove to be correct.
By their nature, Forward-Looking Statements are
subject to inherent risks and uncertainties that may be general or
specific and which give rise to the possibility that expectations,
forecasts, predictions, projections or conclusions will not prove
to be accurate, that assumptions may not be correct and that
objectives, strategic goals and priorities will not be achieved. A
variety of factors, including known and unknown risks, many of
which are beyond our control, could cause actual results to differ
materially from the Forward-Looking Statements in this press
release and other reports we file with, or furnish to, the SEC and
other regulatory agencies and made by our directors, officers,
other employees and other persons authorized to speak on our
behalf. Such factors include, without limitation, the risk that the
COVID-19 pandemic may disrupt our operations and those of our
suppliers and distribution channels and negatively impact the
demand for and use of our products; the risk that cost savings and
any other synergies from the Altria Investment may not be fully
realized or may take longer to realize than expected; the risk that
we will not complete planned dispositions, including the sale of
OGBC, or, if completed, obtain our anticipated sales price; the
implementation and effectiveness of key personnel changes; future
levels of revenues; consumer demand for cannabis and U.S. hemp
products; our ability to manage disruptions in credit markets or
changes to our credit ratings; future levels of capital,
environmental or maintenance expenditures, general and
administrative and other expenses; the success or timing of
completion of ongoing or anticipated capital or maintenance
projects; business strategies, growth opportunities and expected
investment; the adequacy of our capital resources and liquidity,
including but not limited to, availability of sufficient cash flow
to execute our business plan (either within the expected timeframe
or at all); the potential effects of judicial, regulatory or other
proceedings, or threatened litigation or proceedings, on our
business, financial condition, results of operations and cash
flows; volatility in and/or degradation of general economic,
market, industry or business conditions; compliance with applicable
environmental, economic, health and safety, energy and other
policies and regulations and in particular health concerns with
respect to vaping and the use of cannabis and U.S. hemp products in
vaping devices; the anticipated effects of actions of third parties
such as competitors, activist investors or federal (including U.S.
federal), state, provincial, territorial or local regulatory
authorities or self-regulatory organizations, changes in regulatory
requirements in relation to our business and products; legal or
regulatory obstacles that could prevent us from being able to
exercise the PharmaCann Option and thereby realizing the
anticipated benefits of the transaction with PharmaCann; and the
factors discussed under Part I, Item 1A, “Risk Factors” of the
Annual Report. Readers are cautioned to consider these and other
factors, uncertainties and potential events carefully and not to
put undue reliance on Forward-Looking Statements.
Forward-Looking Statements are provided for the
purposes of assisting the reader in understanding our financial
performance, financial position and cash flows as of and for
periods ended on certain dates and to present information about
management’s current expectations and plans relating to the future,
and the reader is cautioned that the Forward-Looking Statements may
not be appropriate for any other purpose. While we believe that the
assumptions and expectations reflected in the Forward-Looking
Statements are reasonable based on information currently available
to management, there is no assurance that such assumptions and
expectations will prove to have been correct. Forward-Looking
Statements are made as of the date they are made and are based on
the beliefs, estimates, expectations and opinions of management on
that date. We undertake no obligation to update or revise any
Forward-Looking Statements, whether as a result of new information,
estimates or opinions, future events or results or otherwise or to
explain any material difference between subsequent actual events
and such Forward-Looking Statements. The Forward-Looking Statements
contained in this press release and other reports we file with, or
furnish to, the SEC and other regulatory agencies and made by our
directors, officers, other employees and other persons authorized
to speak on our behalf are expressly qualified in their entirety by
these cautionary statements.
As used in this press release, “CBD” means
cannabidiol and “U.S. hemp” has the meaning given to the term
“hemp” in the U.S. Agricultural Improvement Act of 2018, including
hemp-derived CBD.
Cronos Group Inc.Condensed
Consolidated Balance Sheets(In thousands of U.S. dollars,
except share amounts)
| |
As of June 30, 2021 |
|
As of December 31, 2020 |
|
Assets |
(Unaudited) |
|
(Audited) |
| Current assets |
|
|
|
|
Cash and cash equivalents |
$ |
895,181 |
|
|
$ |
1,078,023 |
|
|
Short-term investments |
201,699 |
|
|
211,766 |
|
|
Accounts receivable, net |
11,299 |
|
|
8,928 |
|
|
Other receivables |
2,468 |
|
|
10,033 |
|
|
Current portion of loans receivable, net |
5,028 |
|
|
7,083 |
|
|
Prepaids and other current assets |
10,153 |
|
|
11,161 |
|
|
Inventory, net |
35,605 |
|
|
44,002 |
|
|
Held-for-sale assets |
645 |
|
|
1,176 |
|
|
Total current assets |
1,162,078 |
|
|
1,372,172 |
|
|
Advances to joint ventures |
499 |
|
|
467 |
|
|
Investments in equity accounted investees, net |
20,970 |
|
|
19,235 |
|
|
Other investments |
110,392 |
|
|
— |
|
|
Loan receivable, net |
94,113 |
|
|
87,191 |
|
|
Property, plant and equipment, net |
193,920 |
|
|
187,599 |
|
|
Right-of-use assets |
6,687 |
|
|
9,776 |
|
|
Intangible assets, net |
70,409 |
|
|
69,720 |
|
|
Goodwill |
179,543 |
|
|
179,522 |
|
| Total
assets |
$ |
1,838,611 |
|
|
$ |
1,925,682 |
|
| |
|
|
|
| Liabilities |
|
|
|
| Current liabilities |
|
|
|
|
Accounts payable and other liabilities |
$ |
29,829 |
|
|
$ |
42,102 |
|
|
Current portion of lease obligation |
1,206 |
|
|
1,322 |
|
|
Derivative liabilities |
169,563 |
|
|
163,410 |
|
|
Total current liabilities |
200,598 |
|
|
206,834 |
|
|
Due to non-controlling interests |
1,768 |
|
|
2,188 |
|
|
Lease obligation |
6,333 |
|
|
8,492 |
|
| Total
liabilities |
208,699 |
|
|
217,514 |
|
|
Commitments and contingencies |
|
|
|
| |
|
|
|
| Shareholders’
equity |
|
|
|
|
Share capital |
572,858 |
|
|
569,260 |
|
|
Additional paid-in capital |
32,368 |
|
|
34,596 |
|
|
Retained earnings |
955,721 |
|
|
1,064,509 |
|
|
Accumulated other comprehensive income |
71,729 |
|
|
42,999 |
|
|
Total equity attributable to shareholders of Cronos Group |
1,632,676 |
|
|
1,711,364 |
|
|
Non-controlling interests |
(2,764 |
) |
|
(3,196 |
) |
| Total shareholders’
equity |
1,629,912 |
|
|
1,708,168 |
|
| Total liabilities and
shareholders’ equity |
$ |
1,838,611 |
|
|
$ |
1,925,682 |
|
Cronos Group Inc.Condensed Consolidated
Statements of Net Income (Loss) and Comprehensive Income
(Loss)(In thousands of U.S. dollars, except share amounts,
unaudited)
| |
Three months ended June 30, |
|
Six months ended June 30, |
| |
2021 |
|
2020 |
|
2021 |
|
2020 |
|
Net revenue, before excise taxes |
$ |
18,848 |
|
|
$ |
11,432 |
|
|
$ |
33,502 |
|
|
$ |
20,776 |
|
|
Excise taxes |
(3,226 |
) |
|
(1,549 |
) |
|
(5,269 |
) |
|
(2,461 |
) |
| Net revenue |
15,622 |
|
|
9,883 |
|
|
28,233 |
|
|
18,315 |
|
|
Cost of sales |
19,445 |
|
|
9,743 |
|
|
35,019 |
|
|
16,689 |
|
|
Inventory write-down |
11,961 |
|
|
3,062 |
|
|
11,961 |
|
|
11,024 |
|
| Gross loss |
(15,784 |
) |
|
(2,922 |
) |
|
(18,747 |
) |
|
(9,398 |
) |
| Operating
expenses |
|
|
|
|
|
|
|
|
Sales and marketing |
13,209 |
|
|
6,501 |
|
|
23,463 |
|
|
13,613 |
|
|
Research and development (“R&D”) |
5,199 |
|
|
3,631 |
|
|
10,301 |
|
|
8,221 |
|
|
General and administrative |
22,417 |
|
|
18,429 |
|
|
44,323 |
|
|
42,188 |
|
|
Share-based payments |
2,565 |
|
|
2,546 |
|
|
5,064 |
|
|
4,982 |
|
|
Depreciation and amortization |
1,043 |
|
|
679 |
|
|
1,778 |
|
|
1,366 |
|
|
Total operating expenses |
44,433 |
|
|
31,786 |
|
|
84,929 |
|
|
70,370 |
|
| Operating loss |
(60,217 |
) |
|
(34,708 |
) |
|
(103,676 |
) |
|
(79,768 |
) |
| Other income
(loss) |
|
|
|
|
|
|
|
|
Interest income, net |
2,293 |
|
|
3,734 |
|
|
4,622 |
|
|
11,485 |
|
|
Gain (loss) on revaluation of derivative liabilities |
115,248 |
|
|
(35,880 |
) |
|
(1,626 |
) |
|
77,488 |
|
|
Impairment loss on long-lived assets |
— |
|
|
(40,000 |
) |
|
(1,741 |
) |
|
(40,000 |
) |
|
Share of loss from equity accounted investments |
(1,115 |
) |
|
(794 |
) |
|
(2,758 |
) |
|
(1,966 |
) |
|
Other, net |
1,127 |
|
|
(9 |
) |
|
911 |
|
|
785 |
|
|
Total other income (loss) |
117,553 |
|
|
(72,949 |
) |
|
(592 |
) |
|
47,792 |
|
| Income (loss) from continuing
operations |
57,336 |
|
|
(107,657 |
) |
|
(104,268 |
) |
|
(31,976 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations |
(561 |
) |
|
(46 |
) |
|
(582 |
) |
|
(46 |
) |
|
Net income (loss) |
56,775 |
|
|
(107,703 |
) |
|
(104,850 |
) |
|
(32,022 |
) |
| Net loss attributable to
non-controlling interest |
(279 |
) |
|
(726 |
) |
|
(592 |
) |
|
(1,085 |
) |
|
Net income (loss) attributable to Cronos Group |
$ |
57,054 |
|
|
$ |
(106,977 |
) |
|
$ |
(104,258 |
) |
|
$ |
(30,937 |
) |
| Other comprehensive
income (loss) |
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
56,775 |
|
|
$ |
(107,703 |
) |
|
$ |
(104,850 |
) |
|
$ |
(32,022 |
) |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
Foreign exchange gain (loss) on translation |
13,470 |
|
|
51,871 |
|
|
29,754 |
|
|
(61,821 |
) |
|
Total other comprehensive income (loss) |
13,470 |
|
|
51,871 |
|
|
29,754 |
|
|
(61,821 |
) |
| Comprehensive income (loss) |
70,245 |
|
|
(55,832 |
) |
|
(75,096 |
) |
|
(93,843 |
) |
| Less: comprehensive income (loss)
attributable to non-controlling interests |
(394 |
) |
|
(762 |
) |
|
432 |
|
|
(1,098 |
) |
| Comprehensive income
(loss) attributable to Cronos Group |
$ |
70,639 |
|
|
$ |
(55,070 |
) |
|
$ |
(75,528 |
) |
|
$ |
(92,745 |
) |
| Net income (loss) per
share |
|
|
|
|
|
|
|
|
Basic and diluted - continuing operations |
$ |
0.15 |
|
|
$ |
(0.31 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.09 |
) |
| Weighted average number
of outstanding shares |
|
|
|
|
|
|
|
|
Basic |
371,721,382 |
|
|
349,075,408 |
|
|
367,391,118 |
|
|
348,946,439 |
|
|
Diluted |
375,349,856 |
|
|
349,075,408 |
|
|
367,391,118 |
|
|
348,946,439 |
|
Cronos Group Inc.Condensed Consolidated
Statements of Cash Flows(In thousands of U.S. dollars,
except share amounts, unaudited)
| |
Six months ended June 30, |
| |
2021 |
|
2020 |
| Operating
activities |
|
|
|
|
Net loss |
$ |
(104,850 |
) |
|
$ |
(32,022 |
) |
| Adjustments to reconcile net
loss to cash provided by operating activities: |
|
|
|
|
Share-based payments |
5,064 |
|
|
4,982 |
|
|
Depreciation and amortization |
5,083 |
|
|
2,879 |
|
|
Share of loss from investments in equity accounted investees |
2,758 |
|
|
1,966 |
|
|
Gain (loss) on revaluation of derivative liabilities |
1,626 |
|
|
(77,488 |
) |
|
Impairment loss on long-lived assets |
1,741 |
|
|
40,000 |
|
|
Expected credit losses on long-term financial assets |
— |
|
|
1,357 |
|
|
Other non-cash operating activities, net |
(1,192 |
) |
|
599 |
|
| Changes in operating assets
and liabilities: |
|
|
|
|
Accounts receivable, net |
(2,194 |
) |
|
2,895 |
|
|
Other receivables |
6,960 |
|
|
(3,047 |
) |
|
Prepaids and other current assets |
1,268 |
|
|
1,187 |
|
|
Inventory, net |
(1,010 |
) |
|
(24,292 |
) |
|
Inventory write-down |
11,961 |
|
|
11,024 |
|
|
Accounts payable and other liabilities |
(13,412 |
) |
|
(8,417 |
) |
| Cash flows used in operating
activities |
(86,197 |
) |
|
(78,377 |
) |
| Investing
activities |
|
|
|
|
Purchase of short-term investments |
(120,180 |
) |
|
(200,173 |
) |
|
Proceeds from short-term investments |
136,204 |
|
|
279,275 |
|
|
Purchase of other investments |
(110,392 |
) |
|
— |
|
|
Purchase of property, plant and equipment |
(8,347 |
) |
|
(13,344 |
) |
|
Purchase of intangible assets |
(843 |
) |
|
(2,754 |
) |
|
Proceeds from sale of held-for-sale assets |
2,059 |
|
|
— |
|
|
Advances on loans receivable |
(5,064 |
) |
|
(23,974 |
) |
|
Proceeds from sale of other investments |
— |
|
|
769 |
|
|
Cash flows provided by (used in) investing activities |
(106,563 |
) |
|
39,799 |
|
| Financing
activities |
|
|
|
|
Withholding taxes paid on share-based awards |
(8,919 |
) |
|
— |
|
|
Proceeds from exercise of warrants and options |
12 |
|
|
1 |
|
|
Cash flows provided by (used in) financing activities |
(8,907 |
) |
|
1 |
|
| Effect of foreign currency
translation on cash and cash equivalents |
18,825 |
|
|
(51,416 |
) |
|
Net change in cash and cash equivalents |
(182,842 |
) |
|
(89,993 |
) |
| Cash and cash equivalents,
beginning of period |
1,078,023 |
|
|
1,199,693 |
|
|
Cash and cash equivalents, end of period |
$ |
895,181 |
|
|
$ |
1,109,700 |
|
| Supplemental cash flow
information |
|
|
|
|
Interest paid |
$ |
— |
|
|
$ |
90 |
|
|
Interest received |
2,961 |
|
|
11,575 |
|
|
Income taxes paid |
858 |
|
|
— |
|
Non-GAAP Measures
Cronos Group reports its financial results in
accordance with Generally Accepted Accounting Principles in the
United States (“U.S. GAAP”). This press release refers to measures
not recognized under U.S. GAAP (“non-GAAP measures”). These
non-GAAP measures do not have a standardized meaning prescribed by
U.S. GAAP and are therefore unlikely to be comparable to similar
measures presented by other companies. Rather, these non-GAAP
measures are provided as a supplement to corresponding U.S. GAAP
measures to provide additional information regarding the results of
operations from management’s perspective. Accordingly, non-GAAP
measures should not be considered a substitute for, or superior to,
the financial information prepared and presented in accordance with
U.S. GAAP. All non-GAAP measures presented in this press release
are reconciled to their closest reported US GAAP measure.
Reconciliations of historical adjusted financial measures to
corresponding U.S. GAAP measures are provided below.
Adjusted EBITDA
Management reviews Adjusted EBITDA, a non-GAAP
measure which excludes non-cash items and items that do not reflect
management’s assessment of on-going business performance of our
operating segments. Management defines Adjusted EBITDA as net
income (loss) before interest, tax expense, depreciation and
amortization adjusted for: share of loss from equity accounted
investments, impairment loss on long lived assets, loss (gain) on
revaluation of derivative liabilities, transaction costs related to
strategic projects, other, net, loss from discontinued operations,
share-based payments and review costs related to the restatement of
the Company’s 2019 interim financial statements, the Company’s
responses to the reviews of such interim financial statements by
various regulatory authorities and legal costs defending
shareholder class action complaints brought against the Company as
a result of the restatement.
Management believes that Adjusted EBITDA
provides the most useful insight into underlying business trends
and results and provides a more meaningful comparison of
period-over-period results. Management uses Adjusted EBITDA for
planning, forecasting and evaluating business and financial
performance, including allocating resources and evaluating results
relative to employee compensation targets.
The following tables set forth a reconciliation
of net loss as determined in accordance with GAAP to Adjusted
EBITDA for the periods indicated (U.S. dollars in thousands):
| (in thousands of U.S.
dollars) |
Three months ended June 30, 2021 |
| |
United States |
|
Rest of World |
|
CorporateExpenses |
|
Total |
|
Net income (loss) |
$ |
(11,719 |
) |
|
$ |
79,627 |
|
|
$ |
(11,133 |
) |
|
$ |
56,775 |
|
|
Interest income, net |
(20 |
) |
|
(2,273 |
) |
|
— |
|
|
(2,293 |
) |
|
Share of loss from equity accounted investments |
— |
|
|
1,115 |
|
|
— |
|
|
1,115 |
|
|
Gain on revaluation of derivative liabilities |
— |
|
|
(115,248 |
) |
|
— |
|
|
(115,248 |
) |
|
Transaction costs |
— |
|
|
— |
|
|
2,758 |
|
|
2,758 |
|
|
Other, net |
— |
|
|
(1,127 |
) |
|
— |
|
|
(1,127 |
) |
|
Loss from discontinued operations |
— |
|
|
561 |
|
|
— |
|
|
561 |
|
|
Share-based payments |
822 |
|
|
1,743 |
|
|
— |
|
|
2,565 |
|
|
Review costs related to restatement of 2019 interim financial
statements |
— |
|
|
— |
|
|
1,932 |
|
|
1,932 |
|
|
Depreciation and amortization |
206 |
|
|
2,997 |
|
|
— |
|
|
3,203 |
|
| Adjusted EBITDA |
$ |
(10,711 |
) |
|
$ |
(32,605 |
) |
|
$ |
(6,443 |
) |
|
$ |
(49,759 |
) |
| (in thousands of U.S.
dollars) |
Three months ended June 30, 2020 |
| |
United States |
|
Rest of World |
|
CorporateExpenses |
|
Total |
|
Net loss |
$ |
(45,566 |
) |
|
$ |
(55,095 |
) |
|
$ |
(7,042 |
) |
|
$ |
(107,703 |
) |
|
Interest income, net |
(9 |
) |
|
(3,725 |
) |
|
— |
|
|
(3,734 |
) |
|
Share of loss from equity accounted investments |
— |
|
|
794 |
|
|
— |
|
|
794 |
|
|
Impairment loss on long-lived assets |
40,000 |
|
|
— |
|
|
— |
|
|
40,000 |
|
|
Loss on revaluation of derivative liabilities |
— |
|
|
35,880 |
|
|
— |
|
|
35,880 |
|
|
Other, net |
— |
|
|
9 |
|
|
— |
|
|
9 |
|
|
Loss from discontinued operations |
— |
|
|
46 |
|
|
— |
|
|
46 |
|
|
Share-based payments |
756 |
|
|
1,790 |
|
|
— |
|
|
2,546 |
|
|
Review costs related to restatement of 2019 interim financial
statements |
— |
|
|
— |
|
|
3,459 |
|
|
3,459 |
|
|
Depreciation and amortization |
34 |
|
|
1,683 |
|
|
— |
|
|
1,717 |
|
|
Adjusted EBITDA |
$ |
(4,785 |
) |
|
$ |
(18,618 |
) |
|
$ |
(3,583 |
) |
|
$ |
(26,986) |
|
| (in thousands of U.S.
dollars) |
Six months ended June 30, 2021 |
| |
United States |
|
Rest of World |
|
Corporate expenses |
|
Total |
|
Net loss |
$ |
(23,811 |
) |
|
$ |
(62,520 |
) |
|
$ |
(18,519 |
) |
|
$ |
(104,850 |
) |
|
Interest income, net |
(23 |
) |
|
(4,599 |
) |
|
— |
|
|
(4,622 |
) |
|
Share of loss from equity accounted investments |
— |
|
|
2,758 |
|
|
— |
|
|
2,758 |
|
|
Impairment loss on long-lived assets |
1,741 |
|
|
— |
|
|
— |
|
|
1,741 |
|
|
Loss on revaluation of derivative liabilities |
— |
|
|
1,626 |
|
|
— |
|
|
1,626 |
|
|
Transaction costs |
— |
|
|
— |
|
|
3,259 |
|
|
3,259 |
|
|
Other, net |
— |
|
|
(911 |
) |
|
— |
|
|
(911 |
) |
|
Loss from discontinued operations |
— |
|
|
582 |
|
|
— |
|
|
582 |
|
|
Share-based payments |
1,567 |
|
|
3,497 |
|
|
— |
|
|
5,064 |
|
|
Review costs related to restatement of 2019 interim financial
statements |
— |
|
|
— |
|
|
3,937 |
|
|
3,937 |
|
|
Depreciation and amortization |
305 |
|
|
4,778 |
|
|
— |
|
|
5,083 |
|
| Adjusted EBITDA |
$ |
(20,221 |
) |
|
$ |
(54,789 |
) |
|
$ |
(11,323 |
) |
|
$ |
(86,333 |
) |
| (in thousands of U.S.
dollars) |
Six months ended June 30, 2020 |
| |
United States |
|
Rest of World |
|
Corporate expenses |
|
Total |
|
Net income (loss) |
$ |
(52,082 |
) |
|
$ |
33,772 |
|
|
$ |
(13,712 |
) |
|
$ |
(32,022 |
) |
|
Interest income, net |
(16 |
) |
|
(11,469 |
) |
|
— |
|
|
(11,485 |
) |
|
Share of loss from equity accounted investments |
— |
|
|
1,966 |
|
|
— |
|
|
1,966 |
|
|
Impairment loss on long-lived assets |
40,000 |
|
|
— |
|
|
— |
|
|
40,000 |
|
|
Loss on revaluation of derivative liabilities |
— |
|
|
(77,488 |
) |
|
— |
|
|
(77,488 |
) |
|
Other, net |
— |
|
|
(785 |
) |
|
— |
|
|
(785 |
) |
|
Loss from discontinued operations |
— |
|
|
46 |
|
|
— |
|
|
46 |
|
|
Share-based payments |
1,462 |
|
|
3,520 |
|
|
— |
|
|
4,982 |
|
|
Review costs related to restatement of 2019 interim financial
statements |
— |
|
|
— |
|
|
7,866 |
|
|
7,866 |
|
|
Depreciation and amortization |
69 |
|
|
2,810 |
|
|
— |
|
|
2,879 |
|
|
Adjusted EBITDA |
$ |
(10,567 |
) |
|
$ |
(47,628 |
) |
|
$ |
(5,846 |
) |
|
$ |
(64,041) |
|
Foreign currency exchange
rates
All currency amounts in this Press
Release are stated in U.S. dollars (“USD”), which is
our reporting currency, unless otherwise noted. All references to
“dollars” or “$” are to USD. The assets and liabilities
of the Company's foreign operations are translated into USD at the
exchange rate in effect as of June 30, 2021, June 30,
2020 and December 31, 2020. Transactions affecting shareholders’
equity are translated at historical foreign exchange rates. The
consolidated statements of net income (loss) and comprehensive
income (loss) and the consolidated statements of cash flows of the
Company’s foreign operations are translated into USD by applying
the average foreign exchange rate in effect for the reporting
period using Bloomberg.
The exchange rates used to translate from USD to
Canadian dollars (“C$”) is shown below:
| (Exchange rates are shown as
C$ per $) |
As of |
|
|
June 30, 2021 |
|
June 30, 2020 |
|
December 31, 2020 |
| Average rate |
1.2293 |
|
1.3856 |
|
1.3036 |
| Spot rate |
1.2395 |
|
1.3576 |
|
1.2751 |
| Year-to-date average rate |
1.2481 |
|
1.3646 |
|
1.3411 |
For further information, please
contact:Shayne LaidlawInvestor RelationsTel: (416)
504-0004investor.relations@thecronosgroup.com
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