Acreage Holdings, Inc.

CIK:0001762359|SEC Filings

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
REVENUE
Total revenues, net	$ 39,624	$ 56,502	$ 123,923	$ 170,580
Total cost of goods sold	(25,710)	(35,228)	(94,584)	(101,599)
Gross profit	13,914	21,274	29,339	68,981
OPERATING EXPENSES
General and administrative	7,516	8,036	22,814	25,621
Compensation expense	11,746	13,524	35,614	38,930
Equity-based compensation expense	(212)	745	1,939	2,423
Marketing	603	542	1,721	1,942
Loss on disposals of construction in process	2,072	0	2,072	0
Write down of assets held-for-sale, net	0	0	0	3,557
Depreciation and amortization	853	928	2,642	2,919
Total operating expenses	22,578	23,775	66,802	75,392
Net operating loss	(8,664)	(2,501)	(37,463)	(6,411)
Income from investments, net	0	248	0	228
Interest income from loans receivable	0	0	0	10
Interest expense	(8,128)	(9,207)	(25,423)	(26,143)
Other income (loss), net	(983)	10,021	(7,320)	9,823
Total other income (loss)	(9,111)	1,062	(32,743)	(16,082)
Loss before income taxes	(17,775)	(1,439)	(70,206)	(22,493)
Income tax expense	(4,465)	(6,420)	(9,482)	(19,763)
Net loss	(22,240)	(7,859)	(79,688)	(42,256)
Less: net loss attributable to non-controlling interests	(2,732)	(234)	(11,177)	(3,885)
Net loss attributable to Acreage Holdings, Inc.	$ (19,508)	$ (7,625)	$ (68,511)	$ (38,371)
Net loss per share attributable to Acreage Holdings, Inc. - basic (in USD per share)	$ (0.16)	$ (0.07)	$ (0.58)	$ (0.34)
Net loss per share attributable to Acreage Holdings, Inc. - diluted (in USD per share)	$ (0.16)	$ (0.07)	$ (0.58)	$ (0.34)
Weighted average shares outstanding - basic (in shares)	119,965	114,171	117,422	113,181
Weighted average shares outstanding - diluted (in shares)	119,965	114,171	117,422	113,181
Retail
REVENUE
Total revenues, net	$ 27,435	$ 43,857	$ 85,620	$ 130,651
Total cost of goods sold	(14,995)	(23,247)	(47,538)	(67,145)
Wholesale
REVENUE
Total revenues, net	12,188	12,645	38,302	39,845
Total cost of goods sold	(10,715)	(11,981)	(47,046)	(34,454)
Other
REVENUE
Total revenues, net	$ 1	$ 0	$ 1	$ 84

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (79,688)	$ (42,256)
Adjustments for:
Depreciation and amortization	2,642	2,919
Depreciation and amortization included in COGS	8,033	6,058
Equity-based compensation expense	1,939	2,423
Inventory write-off and provision	5,581	8,824
Change in accounting estimate for the costing of inventory	13,828	0
Loss on modification of debt	6,322	0
Gain on business divestiture	0	(47)
Loss on disposal of capital assets, net	2,109	34
Non-cash fair value change related to Warrant liability and Convertible notes	452	0
Bad debt expense	342	320
Non-cash interest expense	6,486	3,743
Non-cash operating lease adjustment	693	(18)
Loss on lease termination	0	(200)
Deferred tax income	(121)	16
Non-cash loss from investments, net	0	870
Write-down of assets held-for-sale	0	3,557
Change, net of acquisitions in:
Accounts receivable	(3,482)	(3,427)
Inventory	(2,987)	(12,572)
Other assets	227	(597)
Interest receivable	1,373	(756)
Accounts payable and accrued liabilities	5,719	(2,628)
Taxes payable	(3,324)	15,026
Interest payable	3,648	3,101
Liability on unrecognized tax benefits	14,691	0
Other liabilities	(2,030)	(3,119)
Net cash used in operating activities	(17,547)	(18,729)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of capital assets	(2,390)	(5,345)
Collection of notes receivable	0	2,150
Business acquisitions, net of cash acquired	0	516
Purchases of intangible assets	(500)	(27)
Proceeds from business divestiture	0	500
Net cash used in investing activities	(2,890)	(2,206)
CASH FLOWS FROM FINANCING ACTIVITIES:
Other equity transactions	(950)	(79)
Proceeds from financing (refer to Note 14 for related party financing)	8,455	27,121
Deferred financing costs paid	0	(500)
Proceeds from issuance of private placement units and warrants	10,000	0
Repayment of debt	(838)	(913)
Capital distributions - non-controlling interests	0	(3,968)
Net cash provided by financing activities	16,667	21,661
Net increase (decrease) in cash, cash equivalents, and restricted cash	(3,770)	726
Cash, cash equivalents, and restricted cash - Beginning of period	17,615	24,067
Cash, cash equivalents, and restricted cash - End of period	13,845	24,793
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid - non-lease	3,478	19,266
Income taxes paid	0	5,933
OTHER NON-CASH INVESTING AND FINANCING ACTIVITIES:
Capital assets not yet paid for	781	5,040
Cumulative effect of change in accounting principle for current expected credit losses, net of tax	0	121
NCI adjustments for changes in ownership	0	(14)
Initial fair value recognition on Warrant Liability	6,972	0
Initial fair value recognition on Convertible Notes	$ 11,408	$ 0

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
ASSETS
Cash and cash equivalents	$ 13,780	$ 13,631
Restricted cash	65	3,984
Accounts receivable, net	10,226	8,459
Inventory	32,909	47,675
Assets held-for-sale	15,255	6,028
Other current assets	2,446	2,136
Total current assets	74,681	81,913
Long-term investments	33,170	33,170
Capital assets, net	128,761	141,732
Operating lease right-of-use assets	13,516	17,531
Intangible assets, net	27,910	31,044
Goodwill	13,761	13,346
Other non-current assets	1,349	1,558
Total non-current assets	218,467	238,381
TOTAL ASSETS	293,148	320,294
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Accounts payable and accrued liabilities	31,893	29,936
Taxes payable	7,566	11,395
Interest payable	5,451	5,539
Operating lease liability, current	1,959	2,457
Debt, current	2,437	4,132
Liabilities related to assets held for sale	15,772	2,253
Other current liabilities	182	2,011
Total current liabilities	65,260	57,723
Debt, non-current	272,225	232,810
Operating lease liability, non-current	14,138	17,293
Deferred tax liability	9,925	10,584
Liability on unrecognized tax benefits	50,571	39,859
Warrant liability	7,133	0
Other liabilities	4	1,054
Total non-current liabilities	353,996	301,600
TOTAL LIABILITIES	419,256	359,323
Commitments and contingencies
Common stock, no par value - unlimited authorized, 121,186 and 120,344 issued and outstanding as of September 30, 2024. 115,995 and 115,153 issued and outstanding as of December 31, 2023.	0	0
Additional paid-in capital	776,489	759,698
Treasury stock, 842 common stock held in treasury	(21,054)	(21,054)
Accumulated deficit	(824,441)	(747,550)
Total Acreage Shareholders' deficit	(69,006)	(8,906)
Non-controlling interests	(57,102)	(30,123)
TOTAL DEFICIT	(126,108)	(39,029)
TOTAL LIABILITIES AND DEFICIT	$ 293,148	$ 320,294