TSNDF Terrascend Corporation (QX)

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 08, 2024

 

 

TerrAscend Corp.

(Exact name of Registrant as Specified in Its Charter)

 

 

Canada			000-56363	Not applicable
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
77 City Centre Drive Suite 501
Mississauga, Ontario, Canada				L5B 1M5
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 844 628-3100

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)*		Name of each exchange on which registered
N/A		TSNDF		N/A

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

* The registrant’s common shares, no par value, trade over-the-counter on OTCQX Best Market under the trading symbol “TSNDF”.

 

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Item 2.02 Results of Operations and Financial Condition.

 

On August 8, 2024, TerrAscend Corp. (the “Company”) issued a press release announcing its financial results and business highlights for the quarter ended June 30, 2024. A copy of this press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference.

 

The information in this Current Report on Form 8-K (including Exhibit 99.1) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

 

Exhibit No.		Description
99.1		Press Release, dated August 8, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			TerrAscend Corp.
Date:	August 8, 2024	By:	/s/ Keith Stauffer
			Keith Stauffer Chief Financial Officer

 

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TerrAscend Reports Second Quarter 2024 Financial Results

 

Net Revenue of $77.5 million, an increase of 7.5% year-over-year

 

Cash Flow from continuing operations of $13.1 million and Free Cash Flow1 of $11.7 million

 

#1 market share position in New Jersey throughout first half of 2024

 

TORONTO, August 8, 2024 - TerrAscend Corp. (“TerrAscend” or the “Company”) (TSX: TSND, OTCQX: TSNDF), a leading North American cannabis company, today reported its financial results for the second quarter ended June 30, 2024. All amounts are expressed in U.S. dollars and are prepared under U.S. Generally Accepted Accounting Principles (“GAAP”), unless indicated otherwise. The financial results of the Company include all entities that are consolidated in the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024 (the “Consolidated Entities”). Any references in this press release to TerrAscend or the Company include references to the Company and the Consolidated Entities.

 

The following financial measures are reported as results from continuing operations due to the shutdown of the Company’s licensed producer business in Canada, which is reported as discontinued operations through September 30, 2023. All historical periods have been restated accordingly.

 

Second Quarter 2024 Financial Highlights

 

“For the second quarter, revenue and EBITDA increased materially year-over-year and we delivered another quarter of positive free cash flow,” stated Jason Wild, Executive Chairman of TerrAscend. “We have the right team, high-performing assets, and a major differentiation in having a ‘wide open map’. This will enable us to strike accretive deals to enter attractive new states via best in breed operators. We are closing in on multiple transactions to expand our geographic footprint and the recent closing of our $140 million term loan provides financial flexibility and fuel to execute this growth strategy. We can’t wait to share more details, when appropriate.”

 

 

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Financial Summary Q2 2024 and Comparative Periods

All figures are restated for the Canadian business recorded as discontinued operations through Q3 2023.

 

(in millions of U.S. Dollars)		Q2 2024				Q2 2023
Revenue, net			77.5				72.1
Year-over-Year increase			7.5	%			12.7	%
Gross profit			37.7				36.2
Gross profit margin			48.6	%			50.2	%
General & Administrative expenses			24.1				30.5
Share-based compensation expense (included in G&A expenses above)			2.0				2.0
G&A as a % of revenue, net			31.1	%			42.3	%
Net loss from continuing operations			(6.2	)			(12.9	)
EBITDA from continuing operations1			18.6				6.5
Adjusted EBITDA from continuing operations1			15.6				12.8
Adjusted EBITDA Margin from continuing operations1			20.2	%			17.8	%
Net cash provided by operations - continuing operations			13.1				1.8
Free Cash Flow1			11.7				(0.2	)

 

1. EBITDA from continuing operations, Adjusted EBITDA from continuing operations, Adjusted EBITDA Margin from continuing operations, and Free Cash Flow are non-GAAP measures defined in the section titled “Definition and Reconciliation of Non-GAAP Measures” below and reconciled to the most directly comparable GAAP measure, at the end of this release.

 

Second Quarter 2024 Business and Operational Highlights

 

Subsequent Events

 

Second Quarter 2024 Financial Results

Net revenue for the second quarter of 2024 was $77.5 million, an increase of 7.5% compared to $72.1 million for the second quarter of 2023. This growth was driven by a 75% increase in wholesale revenue led by New Jersey, Pennsylvania and Maryland, partially offset by an 8.7% decline year-over-year in retail revenue mainly driven by New Jersey and Michigan.

 

Gross profit margin for the second quarter of 2024 was 48.6% as compared to 50.2% in the second quarter of 2023. The year-over-year decrease of 160 basis points was driven by channel mix shift and retail price compression in New Jersey, partially offset by margin expansion in both Michigan and Maryland.

 

General & Administrative expenses (G&A) for the second quarter of 2024 were $24.1 million as compared to $30.5 million in the second quarter of 2023. G&A as a percent of revenue was 31.1% in the second quarter of 2024, compared to 42.3% in the second quarter of 2023. The reduction in G&A as a percent of revenue was driven by a $4.2 million reversal of a bad debt provision related to a legal settlement, combined with other underlying reductions across the business, while growing revenue by 7.5% year-over-year.

 

Net loss from continuing operations for the second quarter of 2024 was $6.2 million, compared to a net loss of $12.9 million in the second quarter of 2023. The improvement was driven by revenue growth while maintaining relatively stable gross profit margins and materially reducing G&A expenses.

 

Adjusted EBITDA from continuing operations for the second quarter of 2024 grew 21.9% year-over-year to $15.6 million, representing a 20.2% Adjusted EBITDA margin, as compared to $12.8 million and 17.8% in the second quarter of 2023. The year-over-year improvement of 240 basis points was driven by G&A expense leverage, partially offset by the decline in gross margin.

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Balance Sheet and Cash Flow

Cash and cash equivalents, including restricted cash, were $30.5 million as of June 30, 2024, compared to $25.7 million as of March 31, 2024. Net cash provided by continuing operations was $13.1 million for the second quarter of 2024 compared to $1.8 million in the second quarter of 2023. This represented the Company’s eighth consecutive quarter of positive cash flow from continuing operations. The second quarter of 2024 included an $8.4 million federal tax refund related to certain amended tax returns for Consolidated Entities. Capex spending was $1.4 million in the second quarter of 2024 mainly related to the completion of the Company’s Hagerstown, Maryland expansion which doubled the output capacity at that site. Free cash flow was $11.7 million as compared to ($0.2) million in the second quarter of 2023. During the second quarter of 2024, payments were made related to $5.8 million of debt paydown and $1.2 million for distributions to the Company’s New Jersey minority partners.

 

Subsequent to the end of the quarter, the Company closed on a senior secured term loan (the “Loan”) for gross proceeds of $140 million from funds managed by FocusGrowth Asset Management, LP (“FocusGrowth”), a leading capital provider to the cannabis sector, along with other members of a loan syndicate. The Loan includes an initial draw of $114 million in gross proceeds by certain of the Consolidated Entities in Pennsylvania, Maryland and California, with a second draw of $26 million in gross proceeds expected in September 2024 by the Consolidated Entities in Michigan. The Loan carries an interest rate of 12.75%, matures in August 2028, contains no prepayment penalties, and is guaranteed by the Company and TerrAscend USA, Inc. No warrants were issued as part of the Loan. The proceeds from the initial draw were used to retire the Company’s existing indebtedness in Pennsylvania with the remainder available for potential M&A transactions focused on geographic expansion. The proceeds from the second draw will be used to retire the Company’s existing indebtedness in Michigan.

 

As of August 7, 2024, there were approximately 368 million basic shares of the Company issued and outstanding, including 291 million Company common shares, 13 million Company preferred shares, as converted, and 63 million Company exchangeable shares. Additionally, there are 44 million warrants and options outstanding at a weighted average price of $3.84.

 

Conference Call

TerrAscend will host a conference call today, August 8, 2024, to discuss these results. Jason Wild, Executive Chairman, Ziad Ghanem, President and Chief Executive Officer, and Keith Stauffer, Chief Financial Officer, will host the call starting at 5:00 p.m. Eastern time. A question-and-answer session will follow management's presentation.

 

Date:	Thursday, August 8, 2024
Time:	5:00 p.m. Eastern Time
Webcast:	https://app.webinar.net/LVQnp1BkreY
Dial-in Number:	1-888-664-6392
Replay:	416-764-8677 or 1-888-390-0541   Available until 12:00 midnight Eastern Time Thursday, August 22, 2024 Replay Entry Code: 532477#

 

Financial results and analyses are available on the Company’s website (www.terrascend.com), the SEC's Electronic Data Gathering and Analysis Retrieval System (EDGAR) (www.sec.gov), and SEDAR+ (www.sedarplus.ca).

 

The Toronto Stock Exchange (“TSX”) has neither approved nor disapproved the contents of this news release. Neither the TSX nor any securities regulator accepts responsibility for the adequacy or accuracy of this release.

 

About TerrAscend

TerrAscend is a leading TSX-listed cannabis company with interests across the North American cannabis sector, including vertically integrated operations in Pennsylvania, New Jersey, Maryland, Michigan and California through TerrAscend Growth Corp. and retail operations in Canada through TerrAscend Canada Inc.. TerrAscend operates The Apothecarium, Gage and other dispensary retail locations as well as scaled cultivation, processing, and manufacturing facilities in its core markets. TerrAscend’s cultivation and manufacturing practices yield consistent, high-quality cannabis, providing industry-leading product selection to both the medical and legal adult-use markets. The Company owns or licenses several synergistic businesses and brands including Gage Cannabis, The Apothecarium, Cookies, Lemonnade, Ilera Healthcare, Kind Tree, Legend, State Flower, Wana, and Valhalla Confections. For more information visit www.terrascend.com.

 

Caution Regarding Cannabis Operations in the United States

Investors should note that there are significant legal restrictions and regulations that govern the cannabis industry in the United States. Cannabis remains a Schedule I drug under the US Controlled Substances Act, making it illegal under federal law in the United States to, among other things, cultivate, distribute, or possess cannabis in the United States. Financial transactions involving proceeds generated by, or intended to promote, cannabis-related business activities in the United States may form the basis for prosecution under applicable US federal money laundering legislation.

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While the approach to enforcement of such laws by the federal government in the United States has trended toward non-enforcement against individuals and businesses that comply with medical or adult-use cannabis programs in states where such programs are legal, strict compliance with state laws with respect to cannabis will neither absolve TerrAscend of liability under U.S. federal law, nor will it provide a defense to any federal proceeding which may be brought against TerrAscend. The enforcement of federal laws in the United States is a significant risk to the business of TerrAscend and any proceedings brought against TerrAscend thereunder may adversely affect TerrAscend's operations and financial performance.

 

Forward Looking Information

This news release contains “forward-looking information” within the meaning of applicable securities laws. Forward-looking information contained in this press release may be identified by the use of words such as, “may”, “would”, “could”, “will”, “likely”, “expect”, “anticipate”, “believe, “intend”, “plan”, “forecast”, “project”, “estimate”, “outlook” and other similar expressions, and include statements with respect to the Company’s expectations regarding the financial and other benefits of the Loan to the Company’s operations and growth strategy; the Company’s expected use of proceeds from the Loan; the Company’s potential expansion into other markets and U.S federal regulatory reform. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors relevant in the circumstances, including assumptions in respect of current and future market conditions, the current and future regulatory environment, and the availability of licenses, approvals and permits.

 

Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company can give no assurance that they will prove to be correct. Actual results and developments may differ materially from those contemplated by these statements. Forward-looking information is subject to a variety of risks and uncertainties that could cause actual events or results to differ materially from those projected in the forward-looking information. Such risks and uncertainties include, but are not limited to, current and future market conditions; risks related to federal, state, provincial, territorial, local and foreign government laws, rules and regulations, including federal and state laws in the United States relating to cannabis operations in the United States; and the risk factors set out in the Company’s most recently filed MD&A, filed with the Canadian securities regulators and available under the Company’s profile on SEDAR+ at www.sedarplus.ca and in the section titled “Risk Factors” in the Company’s Annual Report for the year ended December 31, 2023 filed with the Securities and Exchange Commission on March 14, 2024.

 

The statements in this press release are made as of the date of this release. The Company disclaims any intent or obligation to update any forward-looking information, whether, as a result of new information, future events, or results or otherwise, other than as required by applicable securities laws.

 

Definition and Reconciliation of Non-GAAP Measures

In addition to reporting the financial results in accordance with GAAP, the Company reports certain financial results that differ from what is reported under GAAP. Non-GAAP measures used by management do not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies. The Company believes that certain investors and analysts use these measures to measure a company’s ability to meet other payment obligations or as a common measurement to value companies in the cannabis industry, and the Company calculates: (i) EBITDA from continuing operations and Adjusted EBITDA from continuing operations as net loss, adjusted to exclude provision for income taxes, finance expenses, depreciation and amortization, share-based compensation, loss from revaluation of contingent consideration, gain on fair value of derivative liabilities and purchase option derivative assets, gain on lease termination, and certain other items, which management believes is not reflective of the ongoing operations and performance, (ii) Adjusted EBITDA Margin from continuing operations as EBITDA from continuing operations adjusted for certain material non-cash items such as share-based compensation, loss from revaluation of contingent consideration, gain on fair value of derivative liabilities and purchase option derivative assets, gain on lease termination, certain other items, which management believes is not reflective of the ongoing operations and performance of the Company, (iii) Free Cash Flow as net cash provided by operating activities from continuing operations as presented in the Consolidated Statements of Cash Flows, less capital expenditures for property and equipment, and (iv) General & Administrative expenses excluding stock-based compensation as a percentage of Revenue, net. Such information is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The Company believes this definition is a useful measure to assess the performance of the Company as it provides more meaningful operating results by excluding the effects of expenses that are not reflective of the Company’s underlying business performance and other one-time or non-recurring expenses.

 

For more information regarding TerrAscend: 

Keith Stauffer

Chief Financial Officer

ir@terrascend.com

855-837-7295

 

 

 

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TerrAscend Corp.

Consolidated Balance Sheet

(Amounts expressed in thousands of United States dollars, except for share and per share amounts)

 

		At				At
		June 30, 2024				December 31, 2023
Assets
Current assets
Cash and cash equivalents		$	27,378			$	22,241
Restricted cash			3,113				3,106
Accounts receivable, net			16,799				19,048
Investments			1,737				1,913
Inventory			51,009				51,683
Prepaid expenses and other current assets			4,771				4,898
Total current assets			104,807				102,889
Non-current assets
Property and equipment, net			193,340				196,215
Deposits			284				337
Operating lease right of use assets			41,645				43,440
Intangible assets, net			212,515				215,854
Goodwill			106,929				106,929
Other non-current assets			724				854
Total non-current assets			555,437				563,629
Total assets		$	660,244			$	666,518
Liabilities and shareholders' equity
Current liabilities
Accounts payable and accrued liabilities		$	46,918			$	49,897
Deferred revenue			4,699				4,154
Loans payable, current			15,946				137,737
Contingent consideration payable, current			2,632				6,446
Operating lease liability, current			2,330				1,244
Derivative liability, current			899				—
Lease obligations under finance leases, current			93				2,030
Corporate income tax payable			3,184				4,775
Other current liabilities			756				717
Total current liabilities			77,457				207,000
Non-current liabilities
Loans payable, non-current			171,926				61,633
Operating lease liability, non-current			42,654				45,384
Lease obligations under finance leases, non-current			2,140				407
Derivative liability, non-current			2,253				5,162
Convertible debt			8,126				7,266
Deferred income tax liability			16,760				17,175
Contingent consideration payable, non-current			2,109				—
Liability on uncertain tax position and other long term liabilities			110,673				81,751
Total non-current liabilities			356,641				218,778
Total liabilities			434,098				425,778
Commitments and contingencies
Shareholders' equity
Share capital
Series A, convertible preferred stock, no par value, unlimited shares authorized; 12,350 and 12,350 shares outstanding as of June 30, 2024 and December 31, 2023, respectively			—				—
Series B, convertible preferred stock, no par value, unlimited shares authorized; 600 and 600 shares outstanding as of June 30, 2024 and December 31, 2023, respectively			—				—
Series C, convertible preferred stock, no par value, unlimited shares authorized; nil and nil shares outstanding as of June 30, 2024 and December 31, 2023, respectively			—				—
Series D, convertible preferred stock, no par value, unlimited shares authorized; nil and nil shares outstanding as of June 30, 2024 and December 31, 2023, respectively			—				—
Proportionate voting shares, no par value, unlimited shares authorized; nil and nil shares outstanding as of June 30, 2024 and December 31, 2023, respectively			—				—
Exchangeable shares, no par value, unlimited shares authorized; 63,492,038 and 63,492,038 shares outstanding as of June 30, 2024 and December 31, 2023, respectively			—				—
Common shares, no par value, unlimited shares authorized; 291,507,430 and 288,327,497 shares outstanding as of June 30, 2024 and December 31, 2023, respectively			—				—
Additional paid in capital			945,797				944,859
Accumulated other comprehensive income			2,457				1,799
Accumulated deficit			(723,590	)			(704,162	)
Non-controlling interest			1,482				(1,756	)
Total shareholders' equity			226,146				240,740
Total liabilities and shareholders' equity		$	660,244			$	666,518

 

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TerrAscend Corp.

Consolidated Statements of Operations and Comprehensive Loss

(Amounts expressed in thousands of United States dollars, except for share and per share amounts)

 

			For the Three Months Ended								For the Six Months Ended
			June 30, 2024				June 30, 2023					June 30, 2024				June 30, 2023
Revenue, net			$	77,523			$	72,124				$	158,156			$	141,522
Cost of sales				39,840				35,898					81,742				71,396
Gross profit				37,683				36,226					76,414				70,126
Operating expenses:
General and administrative				24,060				30,476					52,068				58,206
Amortization and depreciation				2,190				2,242					4,405				4,271
Impairment of property and equipment and right of use assets				—				—					2,438				28
Other operating (income) expense				(1,186	)			10					(1,186	)			317
Total operating expenses				25,064				32,728					57,725				62,822
Income from operations				12,619				3,498					18,689				7,304
Other expense (income)
Loss from revaluation of contingent consideration				1,827				—					3,220				—
Gain on fair value of derivative liabilities and purchase option derivative assets				(2,922	)			(215	)				(1,939	)			(653	)
Finance and other expenses				8,891				8,171					17,480				18,258
Transaction and restructuring costs				—				389					—				392
Unrealized and realized foreign exchange loss (gain)				104				(101	)				389				(132	)
Unrealized and realized loss on investments				227				1,661					227				2,360
Income (loss) from continuing operations before provision for income taxes				4,492				(6,407	)				(688	)			(12,921	)
Provision for income taxes				10,729				6,448					20,400				19,112
Net loss from continuing operations			$	(6,237	)		$	(12,855	)			$	(21,088	)		$	(32,033	)
Discontinued operations:
Loss from discontinued operations, net of tax			$	—			$	(621	)			$	—			$	(4,212	)
Net loss			$	(6,237	)		$	(13,476	)			$	(21,088	)		$	(36,245	)
Foreign currency translation adjustment				(260	)			408					(658	)			755
Comprehensive loss			$	(5,977	)		$	(13,884	)			$	(20,430	)		$	(37,000	)
Net loss from continuing operations attributable to:
Common and proportionate Shareholders of the Company			$	(8,180	)		$	(14,998	)			$	(25,235	)		$	(36,362	)
Non-controlling interests			$	1,943			$	2,143				$	4,147			$	4,329
Comprehensive loss attributable to:
Common and proportionate Shareholders of the Company			$	(7,920	)		$	(16,027	)			$	(24,577	)		$	(41,329	)
Non-controlling interests			$	1,943			$	2,143				$	4,147			$	4,329
Net loss per share - basic:
Continuing operations			$	(0.03	)		$	(0.05	)			$	(0.09	)		$	(0.13	)
Discontinued operations				—				—					—				(0.02	)
Net loss per share - basic			$	(0.03	)		$	(0.05	)			$	(0.09	)		$	(0.15	)
Weighted average number of outstanding common shares				291,488,661				275,186,279					291,053,614				271,223,233
Net loss per share - diluted:
Continuing operations			$	(0.03	)		$	(0.05	)			$	(0.09	)		$	(0.13	)
Discontinued operations				—				—					—			$	(0.02	)
Net loss per share - diluted			$	(0.03	)		$	(0.05	)			$	(0.09	)		$	(0.15	)
Weighted average number of outstanding common shares, assuming dilution				291,488,661				275,186,279					291,053,614				271,223,233

 

 

 

 

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TerrAscend Corp.

Consolidated Statements of Cash Flows

(Amounts expressed in thousands of United States dollars, except for share and per share amounts)

 

	For the Six Months Ended
	June 30, 2024				June 30, 2023
Operating activities
Net loss from continuing operations	$	(21,088	)		$	(32,033	)
Adjustments to reconcile net loss to net cash provided by operating activities
Non-cash adjustments of inventory		—				1,081
Accretion expense		8,375				5,673
Depreciation of property and equipment and amortization of intangible assets		9,993				9,761
Amortization of operating right-of-use assets		1,481				932
Share-based compensation		3,446				3,694
Deferred income tax (recovery) expense		(415	)			815
Gain on fair value of derivative liabilities and purchase option derivative assets		(1,939	)			(653	)
Gain on disposal of fixed assets		(17	)			345
Unrealized and realized loss on investments		227				2,410
Loss from revaluation of contingent consideration		3,220				—
Impairment of property and equipment and right of use assets		2,438				—
Gain on lease termination		(1,169	)			—
Bad debt recovery		(1,307	)			(23	)
Unrealized and realized foreign exchange loss (gain)		389				(132	)
Changes in operating assets and liabilities
Receivables		1,358				318
Inventory		1,970				(7,851	)
Prepaid expense and other current assets		119				(319	)
Deposits		53				431
Other assets		77				714
Accounts payable and accrued liabilities and other payables		(8,019	)			4,089
Operating lease liability		(1,147	)			(337	)
Other liability		(536	)			(173	)
Uncertain tax position liabilities		29,917				1,258
Corporate income tax payable		(1,591	)			22,127
Deferred revenue		545				157
Net cash provided by operating activities- continuing operations		26,380				12,284
Net cash used in operating activities - discontinued operations		—				(3,164	)
Net cash provided by operating activities		26,380				9,120
Investing activities
Investment in property and equipment		(4,272	)			(4,504	)
Investment in intangible assets		(699	)			(262	)
Principal payments received on lease receivable		—				104
Insurance recovery for property and equipment		871				—
Receipt of convertible debenture payment		—				738
Payment for land contracts		(478	)			(769	)
Cash portion of consideration paid in acquisitions, net of cash of acquired		(250	)			(14,469	)
Net cash used in investing activities - continuing operations		(4,828	)			(19,162	)
Net cash provided investing activities - discontinued operations		—				14,285
Net cash used in investing activities		(4,828	)			(4,877	)
Financing activities
Transfer of Employee Retention Credit		—				12,677
Proceeds from loan payable, net of transaction costs		3,137				23,872
Proceeds from options and warrants exercised		—				81
Loan principal paid		(18,048	)			(40,359	)
Loan amendment fee paid and prepayment premium paid		—				(1,178	)
Capital distributions paid to non-controlling interests		(1,564	)			(3,415	)
Proceeds from private placement, net of share issuance costs		—				19,218
Payments made for financing obligations and finance lease		(316	)			(941	)
Net cash (used in) provided by financing activities- continuing operations		(16,791	)			9,955
Net cash used in financing activities- discontinued operations		—				(5,539	)
Net cash (used in) provided by financing activities		(16,791	)			4,416
Net increase in cash and cash equivalents and restricted cash during the period		4,761				8,659
Net effects of foreign exchange		383				(901	)
Cash and cash equivalents and restricted cash, beginning of the period		25,347				26,763
Cash and cash equivalents and restricted cash, end of the period	$	30,491			$	34,521
Supplemental disclosure with respect to cash flows
Income taxes paid (refund received)	$	(8,116	)		$	(4,582	)
Interest paid	$	12,599			$	9,259
Lease termination fee paid	$	271			$	—
Non-cash transactions
Equity and warrant liability issued for acquisitions and non-controlling interest	$	4,674			$	10,267
Shares issued for legal and liability settlement	$	—			$	794
Distribution payable to non-controlling interests	$	719			$	—
Accrued capital purchases	$	811			$	529

 

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TerrAscend Corp.

Reconciliation of GAAP to Non-GAAP Financial Measures

(Amounts expressed in thousands of United States dollars, except for percentages)(unaudited)

 

The table below reconciles net loss from continuing operations to EBITDA from continuing operations and Adjusted EBITDA from continuing operations:

 

		For the Three Months Ended
		June 30, 2024				June 30, 2023
Revenue, net		$	77,523				72,124
Net loss			(6,237	)		$	(13,476	)
Net loss margin %			-8.0	%			-18.7	%
Loss from discontinued operations			—				621
Loss from continuing operations			(6,237	)			(12,855	)
Add (deduct) the impact of:
Provision for income taxes			10,729				6,448
Finance expenses			9,132				7,963
Amortization and depreciation			4,993				4,991
EBITDA from continuing operations			18,617				6,547
Add (deduct) the impact of:
Share-based compensation			1,960				1,981
Loss from revaluation of contingent consideration			1,827				—
Bad debt recovery			(4,169	)			—
Other one-time items			1,176				2,932
Loss (gain) on lease termination and derecognition of ROU asset			(1,169	)			—
Gain on fair value of derivative liabilities and purchase option derivative assets			(2,922	)			(215	)
Impairment of property and equipment			—				10
Gain on disposal of fixed assets			(17	)			—
Unrealized and realized loss on investments			227				1,661
Unrealized and realized foreign exchange loss (gain)			104				(101	)
Adjusted EBITDA from continuing operations		$	15,634			$	12,815
Adjusted EBITDA Margin from continuing operations			20.2	%			17.8	%

 

The table below reconciles Net cash provided by (used in) operating activities – continuing operations to Free Cash Flow:

 

		For the Three Months Ended
		June 30, 2024				June 30, 2023
Net cash provided by operating activities- continuing operations		$	13,129			$	1,830
Capital expenditures for property and equipment			(1,476	)			(2,007	)
Free Cash Flow		$	11,653			$	(177	)

 

The table below reconciles Revenue, net to General & Administrative expenses excluding stock-based compensation as a percentage of revenue, net:

 

		For the Three Months Ended
		June 30, 2024				June 30, 2023
Revenue, net		$	77,523			$	72,124
General & Administrative expenses			24,060				30,476
Less: stock-based compensation			1,960				1,981
General & Administrative expenses excluding stock-based compensation		$	22,100			$	28,495
G&A excluding stock-based compensation as a % of revenue, net			28.5	%			39.5	%

 

 

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v3.24.2.u1

Document And Entity Information	Aug. 08, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 08, 2024
Entity Registrant Name	TerrAscend Corp.
Entity Central Index Key	0001778129
Entity Emerging Growth Company	true
Entity File Number	000-56363
Entity Incorporation, State or Country Code	Z4
Entity Tax Identification Number	00-0000000
Entity Address, Address Line One	77 City Centre Drive Suite 501
Entity Address, City or Town	Mississauga
Entity Address, State or Province	ON
Entity Address, Country	CA
Entity Address, Postal Zip Code	L5B 1M5
City Area Code	844
Local Phone Number	628-3100
Entity Information, Former Legal or Registered Name	Not Applicable
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Ex Transition Period	false
Title of 12(b) Security	N/A
Trading Symbol	TSNDF
Security Exchange Name	NONE

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