¨ | REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
x | ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the nine month fiscal period ended March 31, 2023 |
Commission File Number: 001-38691 |
British Columbia, Canada |
2833 | N/A | ||||||||||||
(Province or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code) | (I.R.S. Employer Identification No.) |
Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered |
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Common Shares, no par value
|
ACB | The Nasdaq Global Select Market |
||||||
Rights to purchase Common Shares, without par value |
x |
Annual Information Form |
x |
Audited Annual Financial Statements |
Yes | x | No | ¨ |
Yes | x | No |
¨ |
Document | Exhibit No. | ||||
Audited consolidated financial statements of the Company and notes thereto as at and for the nine month fiscal period ended March 31, 2023, together with the report thereon of the independent registered public accounting firm* | 99.5 | ||||
Management’s Discussion and Analysis of the Company for the nine month fiscal period ended March 31, 2023 (the ““MD&A”)* | 99.6 | ||||
Annual Information Form of the Company for the nine month fiscal period ended March 31, 2023 (the “AIF”)* | 99.7 |
Financial Period Ending |
Audit Fees
($)(2)
|
Audit Related Fees
($)(3)
|
Tax Fees
($)(4)
|
All Other Fees
($)(5)
|
||||||||||
March 31, 2023(1) |
3,388,832 | — | 356,438 | — | ||||||||||
June 30, 2022 | 4,378,890 | — | 255,944 | 32,800 |
Exhibit Number |
Exhibit Description | ||||
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|||||
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||
Certification of Chief Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||
Certification of Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||
Audited consolidated financial statements of the Company and notes thereto as at and for the nine months ended March 31, 2023, together with the report thereon of the independent auditor | |||||
Management’s Discussion and Analysis for the nine months ended March 31, 2023 | |||||
Annual Information Form of the Company for the nine months ended March 31, 2023 | |||||
Consent of KPMG LLP | |||||
101 | Interactive Data File (formatted as Inline XBRL) | ||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Date: June 14, 2023 | AURORA CANNABIS INC. |
||||||||||
By |
(signed) “Glen Ibbott” |
||||||||||
Glen Ibbott Chief Financial Officer |
By: | /s/ Miguel Martin | ||||
Miguel Martin Chief Executive Officer (Principal Executive Officer) |
By: | /s/ Glen Ibbott | ||||
Glen Ibbott Chief Financial Officer (Principal Financial Officer) |
By: | /s/ Miguel Martin | ||||
Miguel Martin Chief Executive Officer (Principal Executive Officer) |
By: | /s/ Glen Ibbott | ||||
Glen Ibbott Chief Financial Officer (Principal Financial Officer) |
/s/ Miguel Martin | /s/ Glen Ibbott | |||||||
Miguel Martin
Chief Executive Officer
|
Glen Ibbott
Chief Financial Officer
|
Notes | March 31, 2023 | June 30, 2022 | |||||||||
$ | $ | ||||||||||
Assets | |||||||||||
Current | |||||||||||
Cash and cash equivalents | 234,942 | 437,807 | |||||||||
Restricted cash | 23 | 65,900 | 50,972 | ||||||||
Accounts receivable | 4, 5, 30(a) | 41,308 | 46,995 | ||||||||
Income taxes receivable | 37 | 57 | |||||||||
Marketable securities | 7 | — | 1,331 | ||||||||
Biological assets | 9 | 22,690 | 23,827 | ||||||||
Inventory | 10 | 106,132 | 116,098 | ||||||||
Prepaids and other current assets | 14 | 8,280 | 6,539 | ||||||||
Assets held for sale | 12 | 638 | 61,495 | ||||||||
479,927 | 745,121 | ||||||||||
Property, plant and equipment | 11 | 322,969 | 233,465 | ||||||||
Derivatives | 7 | 7,249 | 26,283 | ||||||||
Deposits and other long-term assets | 14 | 15,786 | 3,150 | ||||||||
Investments in associates and joint ventures | 8 | — | 1,207 | ||||||||
Lease receivable | 6,496 | 4,434 | |||||||||
Intangible assets | 15 | 59,680 | 70,696 | ||||||||
Goodwill | 15 | 18,715 | — | ||||||||
Deferred tax assets | 13 | 15,500 | — | ||||||||
Total assets | 926,322 | 1,084,356 | |||||||||
Liabilities | |||||||||||
Current | |||||||||||
Accounts payable and accrued liabilities | 30(b) | 75,825 | 69,874 | ||||||||
Income taxes payable | 161 | 167 | |||||||||
Deferred revenue | 27 | 1,739 | 3,850 | ||||||||
Convertible debentures | 16 | 132,571 | 26,854 | ||||||||
Loans and borrowings | 17 | 9,571 | — | ||||||||
Lease liabilities | 18 | 5,413 | 6,150 | ||||||||
Provisions | 3 | 4,453 | 5,410 | ||||||||
Other current liabilities | 5 | 12,572 | 12,564 | ||||||||
Liabilities held for sale | 12 | — | 5,988 | ||||||||
242,305 | 130,857 | ||||||||||
Convertible debentures | 16 | — | 199,650 | ||||||||
Loans and borrowings | 17 | 36,163 | — | ||||||||
Lease liabilities | 18 | 43,804 | 36,837 | ||||||||
Derivative liability | 16, 19(c) | 9,634 | 37,297 | ||||||||
Contingent consideration payable | 29, 30(b) |
12,487 | 14,371 | ||||||||
Other long-term liability | 13 |
48,047 | 128 | ||||||||
Deferred tax liability | 13, 24 | 16,745 | 2,862 | ||||||||
Total liabilities | 409,185 | 422,002 | |||||||||
Shareholders’ equity | |||||||||||
Share capital | 19 | 6,841,234 | 6,754,626 | ||||||||
Reserves | 154,040 | 157,213 | |||||||||
Accumulated other comprehensive loss | (212,365) | (211,721) | |||||||||
Deficit | (6,296,833) | (6,038,275) | |||||||||
Total equity attributable to Aurora shareholders | 486,076 | 661,843 | |||||||||
Non-controlling interests | 14 | 31,061 | 511 | ||||||||
Total equity | 517,137 | 662,354 | |||||||||
Total liabilities and equity | 926,322 | 1,084,356 |
Nine months ended | Year ended | ||||||||||
Notes | March 31 2023 | June 30, 2022 | |||||||||
$ | $ | ||||||||||
Revenue from sale of goods | 27 | 195,497 | 251,607 | ||||||||
Revenue from provision of services | 27 | 1,088 | 1,696 | ||||||||
Excise taxes | 27 | (21,617) | (31,964) | ||||||||
Net revenue | 174,968 | 221,339 | |||||||||
Cost of sales | 10 | 150,835 | 212,713 | ||||||||
Gross profit before fair value adjustments | 24,133 | 8,626 | |||||||||
Changes in fair value of inventory and biological assets sold |
10 | 57,487 | 106,072 | ||||||||
Unrealized gain on changes in fair value of biological assets | 9 | (34,129) | (118,671) | ||||||||
Gross profit | 775 | 21,225 | |||||||||
Expense | |||||||||||
General and administration | 83,164 | 113,212 | |||||||||
Sales and marketing | 39,475 | 62,025 | |||||||||
Acquisition costs | 5,638 | 4,689 | |||||||||
Research and development | 4,921 | 10,389 | |||||||||
Depreciation and amortization | 11, 15 | 14,916 | 48,602 | ||||||||
Share-based compensation | 20(a)(b)(c) | 10,764 | 13,757 | ||||||||
158,878 | 252,674 | ||||||||||
Loss from operations | (158,103) | (231,449) | |||||||||
Other Income (expense) | |||||||||||
Legal settlement and contract termination fees | 26(a), (b)(i) | (2,644) | (1,227) | ||||||||
Interest and other income | 14,252 | 4,507 | |||||||||
Finance and other costs | 30(a) | (29,596) | (71,813) | ||||||||
Foreign exchange (loss) gain | 5,975 | (299) | |||||||||
Other (losses) gains | 6(d), 22 |
(5,109) | 47,088 | ||||||||
Restructuring charges | 3 | (325) | (3,131) | ||||||||
Impairment of property, plant and equipment | 11, 12 |
(22,249) | (259,115) | ||||||||
Impairment of investment in associates | 8 |
(1,240) | (5,479) | ||||||||
Impairment of intangible assets and goodwill | 15 | (22,493) | (1,199,202) | ||||||||
(63,429) | (1,488,671) | ||||||||||
Loss before taxes | (221,532) | (1,720,120) | |||||||||
Income tax (expense) recovery | |||||||||||
Current | 24 | (3,167) | (52) | ||||||||
Deferred, net | 13, 24 |
18,404 | 2,193 | ||||||||
15,237 | 2,141 | ||||||||||
Net loss | (206,295) | (1,717,979) | |||||||||
Nine months ended | Year ended | ||||||||||
Notes | March 31 2023 | June 30, 2022 | |||||||||
$ | $ | ||||||||||
Net loss | (206,295) | (1,717,979) | |||||||||
Other comprehensive loss (“OCI”) that will not be reclassified to net loss | |||||||||||
Unrealized gain on marketable securities | 7(a) | (1,205) | (2,067) | ||||||||
(1,205) | (2,067) | ||||||||||
Other comprehensive (loss) income that may be reclassified to net loss | |||||||||||
Share of loss from investment in associates | 8 | — | (2) | ||||||||
Foreign currency translation (gain) loss | 561 | (2,641) | |||||||||
561 | (2,643) | ||||||||||
Total other comprehensive (gain) loss | (644) | (4,710) | |||||||||
Comprehensive loss | (206,939) | (1,722,689) | |||||||||
Net loss attributable to: | |||||||||||
Aurora Cannabis Inc. | (198,997) | (1,717,624) | |||||||||
Non-controlling interests | 14 | (7,298) | (355) | ||||||||
Comprehensive loss attributable to: | |||||||||||
Aurora Cannabis Inc. | (199,641) | (1,722,334) | |||||||||
Non-controlling interests | (7,298) | (355) | |||||||||
Loss per share - basic and diluted | |||||||||||
Total operations | 21 | ($0.62) | ($7.99) |
Share Capital | Reserves | AOCI | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note | Common Shares | Amount |
Share-Based
Compensation
|
Compensation Options/ Warrants/Shares Issued |
Convertible
Notes
|
Change in Ownership Interest |
Obligation to Issue Shares | Total Reserves |
Fair Value |
Deferred Tax |
Associate OCI Pick-up | Foreign Currency Translation | Total AOCI |
Deficit | Non-Controlling Interests | Total | |||||||||||||||||||||||||||||||||||||||||||
# | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2022 | 297,772,238 | 6,754,626 | 206,244 | 37,350 | 419 | (86,800) | — | 157,213 | (213,394) | 18,919 | 208 | (17,454) | (211,721) | (6,038,275) | 511 | 662,354 | |||||||||||||||||||||||||||||||||||||||||||
Shares issued/issuable for business combinations | 19(b) | 2,614,995 | 9,683 | — | (9,683) | — | — | — | (9,683) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Shares issued through equity financing | 19(a) | 44,551,253 | 75,154 | — | — | — | — | 414 | 414 | — | — | — | — | — | — | — | 75,568 | ||||||||||||||||||||||||||||||||||||||||||
Equity financing transaction costs | — | (2,381) | — | — | — | — | — | — | — | — | — | — | — | — | — | (2,381) | |||||||||||||||||||||||||||||||||||||||||||
Deferred tax on transaction costs | — | (516) | — | — | — | — | — | — | — | — | — | — | — | — | — | (516) | |||||||||||||||||||||||||||||||||||||||||||
Share issued under RSU, PSU and DSU plans | 20(b)(c) | 330,824 | 4,668 | (4,668) | — | — | — | — | (4,668) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Share-based compensation(1) |
20 | — | — | 10,764 | — | — | — | — | 10,764 | — | — | — | — | — | — | — | 10,764 | ||||||||||||||||||||||||||||||||||||||||||
NCI contribution | 14 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 25,925 | 25,925 | ||||||||||||||||||||||||||||||||||||||||||
Put option liability | 13 |
— | — | — | — | — | — | — | — | — | — | — | — | — | (47,638) | — | (47,638) | ||||||||||||||||||||||||||||||||||||||||||
Change in ownership interests in net assets | 14 | — | — | — | — | — | — | — | — | — | — | — | — | — | (11,923) | 11,923 | — | ||||||||||||||||||||||||||||||||||||||||||
Comprehensive loss for the period | — | — | — | — | — | — | — | — | (1,205) | — | — | 561 | (644) | (198,997) | (7,298) | (206,939) | |||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2023 | 345,269,310 | 6,841,234 | 212,340 | 27,667 | 419 | (86,800) | 414 | 154,040 | (214,599) | 18,919 | 208 | (16,893) | (212,365) | (6,296,833) | 31,061 | 517.137 |
Share Capital | Reserves | AOCI | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note | Common Shares | Amount |
Share-Based
Compensation
|
Compensation Options/ Warrants |
Convertible Notes | Change in Ownership Interest |
Total Reserves |
Fair Value |
Deferred Tax |
Associate OCI Pick-up | Foreign Currency Translation | Total AOCI |
Deficit | Non-Controlling Interests | Total | |||||||||||||||||||||||||||||||||||||||||
# | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2021 | 198,068,923 | 6,424,296 | 200,214 | 27,667 | 419 | (86,800) | 141,500 | (211,327) | 18,919 | 210 | (14,813) | (207,011) | (4,321,085) | — | 2,037,700 | |||||||||||||||||||||||||||||||||||||||||
Shares issued/issuable for business combinations |
13, 19(b) | 2,467,421 | 9,230 | — | 9,683 | — | — | 9,683 | — | — | — | — | — | — | — | 18,913 | ||||||||||||||||||||||||||||||||||||||||
Shares released for earn out payments | 19(b) | 193,554 | 1,000 | — | — | — | — | — | — | — | — | — | — | — | — | 1,000 | ||||||||||||||||||||||||||||||||||||||||
Shares issued through equity financing | 19(b) | 96,570,138 | 326,446 | — | — | — | — | — | — | — | — | — | — | — | — | 326,446 | ||||||||||||||||||||||||||||||||||||||||
Equity financing transaction costs | — | (13,410) | — | — | — | — | — | — | — | — | — | — | — | — | (13,410) | |||||||||||||||||||||||||||||||||||||||||
Deferred tax on transaction costs | — | (2,193) | — | — | — | — | — | — | — | — | — | — | — | — | (2,193) | |||||||||||||||||||||||||||||||||||||||||
Exercise of RSUs, PSUs, and DSUs | 20(b), 20(c) |
375,193 | 7,727 | (7,727) | — | — | (7,727) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Share-based compensation (1) |
20 | — | — | 13,757 | — | — | — | 13,757 | — | — | — | — | — | — | — | 13,757 | ||||||||||||||||||||||||||||||||||||||||
NCI Contribution | 14 | — | — | — | — | — | — | — | — | — | — | — | — | 434 | 866 | 1,300 | ||||||||||||||||||||||||||||||||||||||||
Shares issued from treasury | 97,009 | 1,530 | — | — | — | — | — | — | — | — | — | — | — | — | 1,530 | |||||||||||||||||||||||||||||||||||||||||
Comprehensive loss for the period | — | — | — | — | — | — | — | (2,067) | — | (2) | (2,641) | (4,710) | (1,717,624) | (355) | (1,722,689) | |||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2022 | 297,772,238 | 6,754,626 | 206,244 | 37,350 | 419 | (86,800) | 157,213 | (213,394) | 18,919 | 208 | (17,454) | (211,721) | (6,038,275) | 511 | 662,354 |
Nine months ended | Year ended | ||||||||||
Notes | March 31 2023 | June 30, 2022 | |||||||||
$ | $ | ||||||||||
Operating activities | |||||||||||
Net loss | (206,295) | (1,717,979) | |||||||||
Adjustments for non-cash items: | |||||||||||
Unrealized gain on changes in fair value of biological assets | 9 | (34,129) | (118,671) | ||||||||
Changes in fair value included in inventory sold | 10 | 57,487 | 106,072 | ||||||||
Depreciation of property, plant and equipment | 11 | 31,987 | 60,174 | ||||||||
Amortization of intangible assets | 15 | 693 | 33,486 | ||||||||
Share-based compensation | 10,764 | 13,757 | |||||||||
Impairment of property, plant and equipment | 11, 12 | 22,249 | 259,115 | ||||||||
Impairment of investments in associates | 8 | 1,240 | 5,479 | ||||||||
Impairment of loans receivable | 30(a) | — | 10,509 | ||||||||
Impairment of intangible assets and goodwill | 15 | 22,493 | 1,199,202 | ||||||||
Accrued interest and accretion expense | 16 | 15,866 | 30,082 | ||||||||
Interest and other income | (168) | (433) | |||||||||
Deferred tax recovery | (18,404) | (2,193) | |||||||||
Other losses (gains) | 22 | 5,112 | (39,604) | ||||||||
Foreign exchange loss | (1,503) | (1,915) | |||||||||
Deferred compensation amortization | 1,903 | — | |||||||||
Changes in non-cash working capital | 23 | (25,116) | 52,652 | ||||||||
Net cash used in operating activities | (115,821) | (110,267) | |||||||||
Investing activities | |||||||||||
Proceeds from investment in derivatives | 3,362 | — | |||||||||
Purchase of property, plant and equipment and intangible assets | 11, 15 | (12,132) | (32,213) | ||||||||
Disposal of property, plant and equipment | 12 | 20,253 | 19,648 | ||||||||
Acquisition of businesses, net of cash acquired | 13 | (38,790) | (23,171) | ||||||||
Payment of contingent consideration | — | (250) | |||||||||
Deposits (paid) received | 16 | (185) | |||||||||
Net cash used in investing activities | (27,291) | (36,171) | |||||||||
Financing activities | |||||||||||
Proceeds from long-term loans | 17 | 7,242 | — | ||||||||
Repayment of long-term loans | 17 | (3,053) | — | ||||||||
Repayment of convertible debenture | 16 | (128,706) | (163,286) | ||||||||
Payments of principal portion of lease liabilities | 18 | (5,148) | (7,545) | ||||||||
Restricted cash | 23 | (14,928) | (31,578) | ||||||||
Shares issued for cash, net of share issue costs | 73,187 | 350,188 | |||||||||
Net cash provided by (used in) financing activities | (71,406) | 147,779 | |||||||||
Effect of foreign exchange on cash and cash equivalents | 11,653 | 15,009 | |||||||||
Increase (decrease) in cash and cash equivalents | (202,865) | 16,350 | |||||||||
Cash and cash equivalents, beginning of period | 437,807 | 421,457 | |||||||||
Cash and cash equivalents, end of period | 234,942 | 437,807 |
Major subsidiaries | Percentage Ownership | Functional Currency | ||||||
2105657 Alberta Inc. (“2105657”) | 100% | Canadian Dollar | ||||||
Aurora Cannabis Enterprises Inc. (“ACE”) | 100% | Canadian Dollar | ||||||
Aurora Deutschland GmbH (“Aurora Deutschland”) | 100% | European Euro | ||||||
Aurora Nordic Cannabis A/S (“Aurora Nordic”) | 100% | Danish Krone | ||||||
Reliva, LLC (“Reliva”) | 100% | United States Dollar | ||||||
TerraFarma Inc. | 100% | Canadian Dollar | ||||||
Whistler Medical Marijuana Corporation (“Whistler”) | 100% | Canadian Dollar | ||||||
Bevo Agtech Inc. | 50.1% | Canadian Dollar | ||||||
CannaHealth Therapeutics Inc. | 100% | Canadian Dollar | ||||||
ACB Captive Insurance Company Inc. | 100% | Canadian Dollar |
Accounting Policy
Restructuring Provision
A restructuring provision is recognized when the Company has developed a detailed formal plan for the restructuring and has raised a valid expectation that it will carry out the restructuring by starting to implement the plan or announcing its main features to those individuals who are affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which reflect amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity.
Loan Loss Provision
The loan loss provision originates from the operations of the insurance company incorporated by the Company, for self insurance related to properties. A loan loss provision is an estimate for known reported losses and loss expenses plus a provision for losses incurred but not reported. These amounts are based upon estimates or losses reported by loss adjusters plus an estimate for losses incurred but not reported in accordance with the recommendations of an independent actuary using the past experience of the Company and industry data.s, offset by actual claims paid. Changes in the loan loss provision are reflected in the consolidated statements of loss and comprehensive loss.
|
Restructuring | Loan Loss Provision | Other | Total | |||||||||||
$ | $ | $ | ||||||||||||
Balance, June 30, 2021 | — | 78 | — | 78 | ||||||||||
Remeasurement | 2,752 | 3,535 | 800 | 7,087 | ||||||||||
Settlements | (1,755) | — | — | (1,755) | ||||||||||
Balance, June 30, 2022 | 997 | 3,613 | 800 | 5,410 | ||||||||||
Remeasurement | 513 | 832 | 8 | 1,353 | ||||||||||
Settlements | (1,510) | — | (800) | (2,310) | ||||||||||
Balance, March 31, 2023 | — | 4,445 | 8 | 4,453 |
Accounting Policy
Accounts receivable are recognized initially at fair value and subsequently measured at amortized cost, less any provisions for impairment. Financial assets measured at amortized cost are assessed for impairment at the end of each reporting period. Impairment provisions are estimated using the expected credit loss impairment model where any expected future credit losses are provided for, irrespective of whether a loss event has occurred at the reporting date.
Estimates of expected credit losses take into account the Company’s collection history, deterioration of collection rates during the average credit period, as well as observable changes in and forecasts of future economic conditions that affect default risk. Where applicable, the carrying amount of a trade receivable is reduced for any expected credit losses through the use of an allowance for doubtful accounts (“AFDA”) provision. Changes in the AFDA provision are recognized in the statement of comprehensive loss. When the Company determines that no recovery of the amount owing is possible, the amount is deemed irrecoverable and the financial asset is written off.
|
Notes | March 31, 2023 | June 30, 2022 | |||||||||
$ | $ | ||||||||||
Trade receivables, net (1) |
30(a) | 35,016 | 28,665 | ||||||||
Sales taxes receivable | 1,214 | 3,137 | |||||||||
Lease receivable | 30(a) | 2,094 | 1,883 | ||||||||
Consideration receivable from divestiture | — | 2,361 | |||||||||
Government grant receivable | 5 | 1,913 | 6,088 | ||||||||
Consideration receivable from sale of facility | — | 3,800 | |||||||||
Other receivables, net (1) (2) |
1,071 | 1,061 | |||||||||
41,308 | 46,995 |
Accounting Policy
The Company recognizes government grants when there is reasonable assurance that it will comply with the conditions required to qualify for the grant, and that the grant will be received. Government grants related to income are recognized as other gains (losses) in the statements of net loss while government grants related to assets, including non-monetary grants at fair value, are recognized as a reduction of the related asset’s carrying amount.
|
Accounting Policy
Marketable securities are initially measured at fair value and are subsequently measured at fair value through profit or loss (“FVTPL”) or are designated at fair value through other comprehensive income (loss) (“FVTOCI”). The Company designates its marketable securities as financial assets measured at FVTOCI. This designation is made on an instrument by instrument basis and if elected, subsequent changes in fair value are recognized in other comprehensive (loss) income and not through profit or loss on disposition.
|
Financial asset hierarchy level | Level 1 | Level 1 | Level 1 | |||||||||||
Marketable securities designated at fair value through other comprehensive income (“FVTOCI”) | Radient | Choom | CTT Pharmaceutical Holdings | Total | ||||||||||
Note 6(a) | ||||||||||||||
$ | $ | $ | $ | |||||||||||
Balance, June 30, 2021 | 3,010 | 741 | — | 3,751 | ||||||||||
Transfer (to) from investment in associates | — | (642) | 289 | (353) | ||||||||||
Unrealized loss on changes in fair value | (1,882) | (99) | (86) | (2,067) | ||||||||||
Balance, June 30, 2022 | 1,128 | — | 203 | 1,331 | ||||||||||
Disposals | — | — | (126) | (126) | ||||||||||
Unrealized loss on changes in fair value | (1,128) | — | (77) | (1,205) | ||||||||||
Balance, March 31, 2023 | — | — | — | — | ||||||||||
Unrealized gain (loss) on marketable securities | ||||||||||||||
Year ended June 30, 2022 | ||||||||||||||
OCI unrealized loss | (1,882) | (99) | (86) | (2,067) | ||||||||||
Nine months ended March 31, 2023 | ||||||||||||||
OCI unrealized loss | (1,128) | — | (77) | (1,205) |
Accounting Policy
Derivatives and debentures are initially measured at fair value and are subsequently measured at FVTPL. If the transaction price does not equal to fair value at the point of initial recognition, management measures the fair value of each component of the investment and any unrealized gains or losses at inception are either recognized in profit or loss or deferred and recognized over the term of the investment, depending on whether the valuation inputs are based on observable market data. The resulting unrealized gain or loss at inception and subsequent changes in fair value are recognized in profit or loss for the period. Transaction costs, which are directly attributable to the acquisition of the investment, are expensed as incurred. Refer to Note 29 for significant judgments in determining the fair value of derivative financial instruments.
|
Financial asset hierarchy level | Level 2 | Level 2 | Level 3 | Level 2 | Level 3 | |||||||||||||||
Derivatives and convertible debentures at fair value through profit or loss (“FVTPL”) | ACI | Choom | Investee-B | High Tide | Investee-C | Total | ||||||||||||||
Note 6(b) | Note 6(a) | |||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||
Balance, June 30, 2021 | 5,661 | 18,151 | 14,393 | 18,665 | 2,512 | 59,382 | ||||||||||||||
Additions | — | 6,000 | — | — | — | 6,000 | ||||||||||||||
Disposals | — | (18,151) | — | — | — | (18,151) | ||||||||||||||
Repayment | — | — | — | (997) | — | (997) | ||||||||||||||
Unrealized loss on changes in fair value | (4,243) | (6,000) | (975) | (9,226) | (50) | (20,494) | ||||||||||||||
Foreign exchange | — | — | 543 | — | — | 543 | ||||||||||||||
Balance, June 30, 2022 | 1,418 | — | 13,961 | 8,442 | 2,462 | 26,283 | ||||||||||||||
Repayment | — | — | — | (537) | (2,490) | (3,027) | ||||||||||||||
Adjustments | — | (211) | — | (211) | ||||||||||||||||
Unrealized gain (loss) on changes in fair value | (1,418) | — | (14,506) | (580) | 28 | (16,476) | ||||||||||||||
Foreign exchange | — | — | 680 | — | — | 680 | ||||||||||||||
Balance, March 31, 2023 | — | — | 135 | 7,114 | — | 7,249 | ||||||||||||||
Current portion | — | — | — | — | — | — | ||||||||||||||
Long-term portion | — | — | 135 | 7,114 | — | 7,249 | ||||||||||||||
Year ended June 30, 2022 | ||||||||||||||||||||
Foreign exchange | — | — | 543 | — | — | 543 | ||||||||||||||
Unrealized loss on changes in fair value | (4,243) | (6,000) | (975) | (9,226) | (50) | (20,494) | ||||||||||||||
(4,243) | (6,000) | (432) | (9,226) | (50) | (19,951) | |||||||||||||||
Nine months ended March 31, 2023 | ||||||||||||||||||||
Foreign exchange | — | — | 680 | — | — | 680 | ||||||||||||||
Unrealized gain (loss) on changes in fair value | (1,418) | — | (14,506) | (580) | 28 | (16,476) | ||||||||||||||
(1,418) | — | (13,826) | (580) | 28 | (15,796) | |||||||||||||||
Accounting Policy
Associates are companies over which Aurora has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence represents the power to participate in the financial and operating policy decisions of the investee but does not represent the right to exercise control or joint control over those policies.
A joint venture is a contractual arrangement whereby the Company and other parties undertake an economic activity that is subject to joint control (i.e. when the strategic, financial and operating policy decisions relating to the activities of the joint venture require the unanimous consent of the parties sharing control).
Investments in associates and joint ventures are accounted for using the equity method and are initially recognized at cost, excluding financial assets that are not in-substance common shares and inclusive of transaction costs. When the Company holds marketable securities or derivative financial assets and subsequently obtains significant influence in that investee, the fair value of the financial instruments are reclassified to investments in associates at the deemed cost with the cumulative unrealized fair value gains or losses in other comprehensive loss, if any, transferred to deficit.
The consolidated financial statements include the Company’s share of the investee’s income, expenses and equity movements. Where the Company transacts with its joint ventures or associates, unrealized profits or losses are eliminated to the extent of the Company’s interest in the joint venture or associate.
Investments in associates and joint ventures are assessed for indicators of impairment at each period end. An impairment test is performed when there is objective evidence of impairment, such as significant adverse changes in the environment in which the equity-accounted investee operates or there is a significant or prolonged decline in the fair value of the investment below its carrying amount. An impairment loss is recorded when the recoverable amount is lower than the carrying amount. An impairment loss is reversed if the reversal is related to an event occurring after the impairment loss is recognized. Reversals of impairment losses are recognized in profit or loss and are limited to the original carrying amount under the equity method as if no impairment had been recognized for the asset in prior periods. The Company uses judgment in assessing whether impairment has occurred or a reversal is required as well as the amounts of such adjustments.
|
CTT Pharmaceutical | Choom | Venn Cannabis | Total | ||||||||||||||
Note | Holdings Inc. | Note 6(a) | |||||||||||||||
$ | $ | $ | $ | ||||||||||||||
Balance, June 30, 2021 | 289 | — | — | 289 | |||||||||||||
Additions | — | 5,825 | 1,156 | 6,981 | |||||||||||||
Share of net income(1) |
— | (344) | 51 | (293) | |||||||||||||
Disposition | (289) | — | — | (289) | |||||||||||||
Impairment | — | (5,479) | — | (5,479) | |||||||||||||
OCI FX and share of OCI loss | — | (2) | — | (2) | |||||||||||||
Balance, June 30, 2022 | — | — | 1,207 | 1,207 | |||||||||||||
Additions | — | — | — | — | |||||||||||||
Share of net income(1) |
22 | — | — | 33 | 33 | ||||||||||||
Disposition | — | — | — | — | |||||||||||||
Impairment | — | — | (1,240) | (1,240) | |||||||||||||
OCI FX and share of OCI loss | — | — | — | — | |||||||||||||
Balance, March 31, 2023 | — | — | — | — |
Accounting Policy
The Company defines biological assets as living plants up to the point of harvest. Biological assets are measured at fair value less costs to sell at the end of each reporting period in accordance with IAS 41 - Agriculture using the income approach. The Company utilizes an income approach to determine the fair value less cost to sell at a specific measurement date, based on the existing plants’ stage of completion up to the point of harvest. The Company cultivates cannabis and propagation plants biological assets. For cannabis plants, the stage of completion is determined based on the specific date of clipping the mother plant, the period-end reporting date, the average growth rate for the strain and facility environment and is calculated on a weighted average basis for the number of plants in the specific lot. Propagation plants are comprised solely of plants from the Bevo business, and are sold as living plants to customers and therefore not harvested into inventory. For propagation plants, the stage of completion is determined based on the propagation date, the promised date, and the period-end reporting date.
The following inputs and assumptions are all categorized within Level 3 on the fair value hierarchy and were used in determining the fair value of cannabis biological assets:
|
||||||||||||||
Inputs and assumptions |
Description |
Correlation between inputs and fair value | ||||||||||||
Average selling price per gram | Represents the average selling price per gram of dried cannabis net of excise taxes, where applicable, for the period for all strains of cannabis sold, which is expected to approximate future selling prices. | If the average selling price per gram were higher (lower), estimated fair value would increase (decrease). | ||||||||||||
Average attrition rate | Represents the weighted average number of plants culled at each stage of production. | If the average attrition rate was lower (higher), estimated fair value would increase (decrease). | ||||||||||||
Weighted average yield per plant | Represents the weighted average number of grams of dried cannabis inventory expected to be harvested from each cannabis plant. | If the weighted average yield per plant was higher (lower), estimated fair value would increase (decrease). | ||||||||||||
Cost per gram to complete production | Based on actual production costs incurred divided by the grams produced in the period. | If the cost per gram to complete production was lower (higher), estimated fair value would increase (decrease). | ||||||||||||
Weighted average effective yield | Represents the estimated percentage of harvested product that meets specifications in order to be sold as a dried cannabis product. | If the weighted average effective yield were higher (lower), the estimated fair value would increase (decrease). | ||||||||||||
Stage of completion in the production process | Calculated by taking the weighted average number of days in production over a total average grow cycle of approximately twelve weeks. | If the number of days in production was higher (lower), estimated fair value would increase (decrease). | ||||||||||||
Production costs are capitalized to cannabis biological assets and include all direct and indirect costs relating to biological transformation. Costs include direct costs of production, such as labor, growing materials, as well as indirect costs such as indirect labor and benefits, quality control costs, depreciation on production equipment, and overhead expenses including rent and utilities. | ||||||||||||||
The following inputs and assumptions are all categorized within Level 3 on the fair value hierarchy and were used in determining the fair value of propagation plants biological assets:
|
||||||||||||||
Inputs and assumptions |
Description |
Correlation between inputs and fair value | ||||||||||||
Selling price per plant | Represents selling price per plant, which is based on committed purchase plans. | If selling price per plant were higher (lower), estimated fair value would increase (decrease). | ||||||||||||
Stage of completion in the production process | Calculated by taking the number of days in production over the promised date less the propagation date. | If the number of days in production was higher (lower), estimated fair value would increase (decrease). | ||||||||||||
Production costs are capitalized to propagation plants biological assets based on a rolling gross margin rate and includes all direct and indirect costs relating to biological transformation. Costs include direct costs of production, such as labor, growing materials, as well as indirect costs such as indirect labor and benefits, quality control costs, depreciation on production equipment, and overhead expenses including rent and utilities. |
March 31, 2023 | June 30, 2022 |
|||||||
$ | $ | |||||||
Indoor cannabis production facilities | 8,428 | 23,367 | ||||||
Outdoor cannabis production facilities | — | 460 | ||||||
Plant propagation production facilities | 14,262 | — | ||||||
22,690 | 23,827 |
Significant inputs & assumptions | Range of inputs | Sensitivity | Impact on fair value | ||||||||||||||
March 31, 2023 |
June 30, 2022 | March 31, 2023 |
June 30, 2022 | ||||||||||||||
Average selling price per gram | $4.42 | $5.18 | Increase or decrease of $1.00 per gram | $3,360 | $9,813 | ||||||||||||
Weighted average yield (grams per plant) | 38.80 | 39.16 | Increase or decrease by 5 grams per plant | $1,438 | $3,219 | ||||||||||||
Weighted average effective yield | 91 | % | 89 | % | Increase of decrease by 5% | $395 | $1,104 | ||||||||||
Cost per gram to complete production | $1.65 | $1.52 | Increase or decrease of $1.00 per gram | $3,427 | $6,607 |
Significant inputs & assumptions | Range of inputs | Sensitivity | Impact on fair value | ||||||||||||||
March 31, 2023 |
June 30, 2022 | March 31, 2023 |
June 30, 2022 | ||||||||||||||
Average selling price per floral/bedding plant | $ | 7.58 | n/a | Increase or decrease by 10% | $1,682 | n/a | |||||||||||
Average stage of completion in the production process | 56 | % | n/a | Increase or decrease by 10% | $2,295 | n/a |
March 31, 2023 |
June 30, 2022 |
|||||||
$ | $ | |||||||
Opening balance | 23,827 | 20,250 | ||||||
Production costs capitalized |
71,326 | 79,620 | ||||||
Biological assets acquired through business combinations (Note 13) |
4,470 | 232 | ||||||
Sale of biological assets | (18,645) | (387) | ||||||
Foreign currency translation | (234) | (1,233) | ||||||
Changes in fair value less cost to sell due to biological transformation |
34,129 | 118,671 | ||||||
Transferred to inventory upon harvest |
(92,183) | (193,326) | ||||||
Ending balance | 22,690 | 23,827 |
Accounting Policy
The Company defines inventory as all cannabis products after the point of harvest (“Cannabis Inventory”), hemp products, purchased finished goods for resale, consumable supplies and accessories. Cannabis Inventory includes harvested cannabis, trim, cannabis oils, capsules, edibles and vaporizers.
Inventories of harvested cannabis are transferred from biological assets at fair value less costs to sell at the point of harvest, which becomes the deemed cost. By-products, such as trim, are measured at their net-realizable-value (“NRV”) at point of harvest which is deducted from the total deemed cost to give a net cost for the primary product. Any subsequent post-harvest costs are capitalized to Cannabis Inventory to the extent that the cost is less than NRV. NRV for work-in-process (“WIP”) and finished Cannabis Inventory is determined by deducting estimated remaining conversion/completion costs and selling costs from the estimated sale price achievable in the ordinary course of business. Conversion and selling costs are determined using average cost. In the period that Cannabis Inventory is sold, the fair value portion of the deemed cost is recorded within changes in fair value of inventory sold line, and the cost of such Cannabis Inventory, including direct and indirect costs, are recorded within the cost of sales line on the statement of comprehensive loss.
Products for resale, consumable supplies and accessories are initially recognized at cost and subsequently valued at the lower of cost and NRV. The Company reviews these types of inventory for obsolescence, redundancy and slow turnover to ensure that they are written-down and reflected at NRV.
The Company uses judgment in determining the NRV of inventory. When assessing NRV, the Company considers the impact of the average selling price per gram, inventory spoilage, inventory excess, age and damage.
|
March 31, 2023 | June 30, 2022 | |||||||||||||||||||
Capitalized cost |
Fair value adjustment |
Carrying value |
Capitalized cost |
Fair value adjustment |
Carrying value |
|||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||
Harvested cannabis |
||||||||||||||||||||
Work-in-process |
30,936 | 14,756 | 45,692 | 40,285 | 27,297 | 67,582 | ||||||||||||||
Finished goods |
13,518 | 1,777 | 15,295 | 9,151 | 2,444 | 11,595 | ||||||||||||||
44,454 | 16,533 | 60,987 | 49,436 | 29,741 | 79,177 | |||||||||||||||
Extracted cannabis |
||||||||||||||||||||
Work-in-process |
11,566 | 2,753 | 14,319 | 13,577 | 2,348 | 15,925 | ||||||||||||||
Finished goods |
8,786 | 561 | 9,347 | 8,257 | 650 | 8,907 | ||||||||||||||
20,352 | 3,314 | 23,666 | 21,834 | 2,998 | 24,832 | |||||||||||||||
Supplies and consumables | 19,923 | — | 19,923 | 10,817 | — | 10,817 | ||||||||||||||
Merchandise and accessories | 1,556 | — | 1,556 | 1,272 | — | 1,272 | ||||||||||||||
Ending balance | 86,285 | 19,847 | 106,132 | 83,359 | 32,739 | 116,098 |
Accounting Policy
Owned Assets
Property, plant and equipment is measured at cost, net of accumulated depreciation and any impairment losses.
Cost includes expenditures that are directly attributable to the asset acquisition. The cost of self-constructed assets includes the cost of materials, direct labor, other costs directly attributable to make the asset available for its intended use, as well as relevant borrowing costs on qualifying assets as further described below. During their construction, property, plant and equipment are classified as construction in progress (“CIP”) and are not subject to depreciation. When the asset is available for use, it is transferred from CIP to the relevant category of property, plant and equipment and depreciation commences.
Where particular parts of an asset are significant, discrete and have distinct useful lives, the Company may allocate the associated costs between the various components, which are then separately depreciated over the estimated useful lives of each respective component. Depreciation is calculated on a straight-line basis over the following estimated useful lives:
Computer software and equipment 3 years
Production equipment 2 - 10 years
Furniture and fixtures 5 years
Building and improvements 10 - 30 years
Residual values, useful lives and depreciation methods are reviewed annually and changes are accounted for prospectively.
Gains and losses on asset disposals are determined by deducting the carrying value from the sale proceeds and are recognized in profit or loss.
The Company capitalizes borrowing costs on qualifying capital construction projects. Upon the asset becoming available for use, capitalization of borrowing costs ceases and depreciation commences on a straight-line basis over the estimated useful life of the related asset.
Right-of-use leased assets
Right-of-use assets are measured at cost, which is calculated as the amount of the initial measurement of lease liability plus any lease payments made at or before the commencement date, any initial direct costs and related restoration costs. The right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the useful life of the underlying asset. The depreciation is recognized from the commencement date of the lease.
If the right-of-use asset is subsequently leased to a third party (a “sublease”), the Company will assess the classification of the sublease as to whether it is a finance or operating lease. Subleases that are classified as an operating lease will recognize lease income while a finance lease will recognize a lease receivable and derecognize the carrying value of the right-of-use asset, with the difference recorded in profit of loss.
Impairment of property, plant and equipment
The Company assesses impairment of property, plant and equipment when an impairment indicator arises (e.g. change in use or discontinued use, obsolescence or physical damage). When the asset does not generate cash inflows that are largely independent of those from other assets or group of assets, the asset is tested at the cash generating unit (“CGU”) level. In assessing impairment, the Company compares the carrying amount of the asset or CGU to the recoverable amount, which is determined as the higher of the asset or CGU’s fair value less costs of disposal and its value-in-use. Value-in-use is assessed based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects applicable market and economic conditions, the time value of money and the risks specific to the asset. An impairment loss is recognized whenever the carrying amount of the asset or CGU exceeds its recoverable amount and is recorded in the consolidated statements of comprehensive loss.
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March 31, 2023 | June 30, 2022 | |||||||||||||||||||||||||
Cost | Accumulated depreciation | Impairment | Net book value | Cost | Accumulated depreciation | Impairment | Net book value | |||||||||||||||||||
Owned assets | ||||||||||||||||||||||||||
Land | 52,077 | — | (1,820) | 50,257 | 14,351 | — | (1,224) | 13,127 | ||||||||||||||||||
Buildings | 239,353 | (83,888) | (3,842) | 151,623 | 396,848 | (76,010) | (224,034) | 96,804 | ||||||||||||||||||
Construction in progress | 37,563 | — | (11,945) | 25,618 | 34,260 | — | (9,168) | 25,092 | ||||||||||||||||||
Computer software & equipment |
31,313 | (29,570) | (20) | 1,723 | 31,960 | (28,244) | (555) | 3,161 | ||||||||||||||||||
Furniture & fixtures | 7,434 | (5,596) | (42) | 1,796 | 10,057 | (5,818) | (1,558) | 2,681 | ||||||||||||||||||
Production & other equipment | 146,960 | (87,425) | (1,686) | 57,849 | 168,829 | (86,287) | (22,080) | 60,462 | ||||||||||||||||||
Total owned assets | 514,700 | (206,479) | (19,355) | 288,866 | 656,305 | (196,359) | (258,619) | 201,327 | ||||||||||||||||||
Right-of-use lease assets | ||||||||||||||||||||||||||
Land | 14,859 | (1,345) | (969) | 12,545 | 7,443 | (1,192) | — | 6,251 | ||||||||||||||||||
Buildings | 36,789 | (15,836) | — | 20,953 | 40,530 | (14,990) | (496) | 25,044 | ||||||||||||||||||
Production & other equipment | 5,343 | (4,738) | — | 605 | 5,087 | (4,244) | — | 843 | ||||||||||||||||||
Total right-of-use lease assets | 56,991 | (21,919) | (969) | 34,103 | 53,060 | (20,426) | (496) | 32,138 | ||||||||||||||||||
Total property, plant and equipment | 571,691 | (228,398) | (20,324) | 322,969 | 709,365 | (216,785) | (259,115) | 233,465 |
Balance, June 30, 2022 | Additions | Additions from business combinations | Disposals | Other (1) |
Depreciation | Impairment | Foreign currency translation | Balance, March 31, 2023 | |||||||||||||||||||||
Owned assets | |||||||||||||||||||||||||||||
Land | 13,127 | — | 21,770 | — | 16,609 | — | (1,820) | 571 | 50,257 | ||||||||||||||||||||
Buildings | 96,804 | 840 | 52,350 | — | 15,467 | (9,774) | (3,842) | (222) | 151,623 | ||||||||||||||||||||
Construction in progress | 25,092 | 5,322 | 1,134 | (36) | 5,135 | — | (11,945) | 916 | 25,618 | ||||||||||||||||||||
Computer software & equipment |
3,161 | 710 | — | — | (867) | (1,284) | (20) | 23 | 1,723 | ||||||||||||||||||||
Furniture & fixtures | 2,681 | 37 | — | — | (874) | (46) | (42) | 40 | 1,796 | ||||||||||||||||||||
Production & other equipment |
60,462 | 1,662 | 17,633 | (1,989) | (1,808) | (16,942) | (1,686) | 517 | 57,849 | ||||||||||||||||||||
Total owned assets | 201,327 | 8,571 | 92,887 | (2,025) | 33,662 | (28,046) | (19,355) | 1,845 | 288,866 | ||||||||||||||||||||
Right-of-use leased assets | |||||||||||||||||||||||||||||
Land | 6,251 | — | — | (29) | 7,580 | (291) | (969) | 3 | 12,545 | ||||||||||||||||||||
Buildings | 25,044 | 57 | — | (6,553) | 5,363 | (3,155) | — | 197 | 20,953 | ||||||||||||||||||||
Production & other equipment |
843 | 498 | — | (182) | (72) | (495) | — | 13 | 605 | ||||||||||||||||||||
Total right-of-use lease assets |
32,138 | 555 | — | (6,764) | 12,871 | (3,941) | (969) | 213 | 34,103 | ||||||||||||||||||||
Total property, plant and equipment |
233,465 | 9,126 | 92,887 | (8,789) | 46,533 | (31,987) | (20,324) | 2,058 | 322,969 |
Balance, June 30, 2021 | Additions | Disposals | Other (1) |
Depreciation | Impairment | Foreign currency translation | Balance, June 30, 2022 | |||||||||||||||||||
Owned assets | ||||||||||||||||||||||||||
Land | 23,977 | 5,565 | (1,210) | (13,785) | — | (1,225) | (195) | 13,127 | ||||||||||||||||||
Real estate | 328,263 | 2,514 | 211 | 9,989 | (19,769) | (224,117) | (287) | 96,804 | ||||||||||||||||||
Construction in progress | 77,639 | 12,888 | (7,158) | (48,395) | — | (9,174) | (708) | 25,092 | ||||||||||||||||||
Computer software & equipment |
7,815 | 431 | (236) | 2,169 | (6,449) | (554) | (15) | 3,161 | ||||||||||||||||||
Furniture & fixtures | 5,909 | 172 | 197 | (259) | (1,740) | (1,557) | (41) | 2,681 | ||||||||||||||||||
Production & other equipment |
101,245 | (1,207) | 2,425 | 5,435 | (25,374) | (21,992) | (70) | 60,462 | ||||||||||||||||||
Total owned assets | 544,848 | 20,363 | (5,771) | (44,846) | (53,332) | (258,619) | (1,316) | 201,327 | ||||||||||||||||||
Right-of-use leased assets | ||||||||||||||||||||||||||
Land | 22,777 | — | (3,513) | (12,187) | (828) | — | 2 | 6,251 | ||||||||||||||||||
Real estate | 36,857 | 1,285 | (1,987) | (5,344) | (5,199) | (496) | (72) | 25,044 | ||||||||||||||||||
Production & other equipment |
1,611 | 55 | — | — | (815) | — | (8) | 843 | ||||||||||||||||||
Total right-of-use lease assets |
61,245 | 1,340 | (5,500) | (17,531) | (6,842) | (496) | (78) | 32,138 | ||||||||||||||||||
Total property, plant and equipment |
606,093 | 21,703 | (11,271) | (62,377) | (60,174) | (259,115) | (1,394) | 233,465 |
Accounting Policy
Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly probable that they will be recovered primarily through sale rather than through continued use. Such assets, or disposal groups, are generally measured at the lower of their carrying amount and the fair value less costs of disposal. Impairment losses recognized upon initial classification as held-for-sale and subsequent gains and losses on re-measurement are recognized in the statement of comprehensive loss. Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortized or depreciated.
|
Colombia Property | Restructuring Facilities | Uruguay Properties |
Nordic Sky | Aurora Sun | Valley | Polaris | Whistler Alpha Lake | Total | |||||||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||||||||||||
Balance, June 30, 2021 | 1,925 | 13,993 | — | — | — | — | — | — | 15,918 | ||||||||||||||||||||
Transfer (to) from Property, Plant, and Equipment | — | (355) | 669 | 8,823 | 34,404 | 5,850 | 18,678 | 638 | 68,707 | ||||||||||||||||||||
Proceeds from disposal | — | (11,440) | (602) | (7,519) | — | — | — | — | (19,561) | ||||||||||||||||||||
Loss on disposal (1) |
— | (2,198) | (67) | (1,304) | — | — | — | — | (3,569) | ||||||||||||||||||||
Balance, June 30, 2022 | 1,925 | — | — | — | 34,404 | 5,850 | 18,678 | 638 | 61,495 | ||||||||||||||||||||
Transfer to Property, Plant, and Equipment | — | — | — | — | (34,404) | — | — | — | (34,404) | ||||||||||||||||||||
Impairment | (1,925) | — | — | — | — | — | — | — | (1,925) | ||||||||||||||||||||
Transfer from Liabilities Held for Sale | — | — | — | — | — | — | (3,977) | — | (3,977) | ||||||||||||||||||||
Proceeds from disposal | — | — | — | — | — | (5,573) | (14,680) | — | (20,253) | ||||||||||||||||||||
Loss on disposal (1) |
— | — | — | — | — | (277) | (21) | — | (298) | ||||||||||||||||||||
Balance, March 31, 2023 | — | — | — | — | — | — | — | 638 | 638 | ||||||||||||||||||||
$ | |||||
Property, plant and equipment | 34,404 | ||||
Assets held for sale | 34,404 | ||||
Accounts payable and accrued liabilities | 11 | ||||
Provisions | 2,000 | ||||
Liabilities held for sale | 2,011 | ||||
$ | |||||
Property, plant and equipment | 18,678 | ||||
Assets held for sale | 18,678 | ||||
Lease liability | 3,977 | ||||
Liabilities held for sale | 3,977 | ||||
Accounting Policy
A business combination is a transaction or event in which an acquirer obtains control of one or more businesses and is accounted for using the acquisition method. The total consideration paid for the acquisition is the aggregate of the fair values of assets acquired, liabilities assumed, and equity instruments issued in exchange for control of the acquiree at the acquisition date. The acquisition date is the date when the Company obtains control of the acquiree. The identifiable assets acquired and liabilities assumed are recognized at their acquisition date fair values, except for deferred taxes and share-based payment awards where IFRS provides exceptions to recording the amounts at fair value. Goodwill represents the difference between total consideration paid and the fair value of the net identifiable assets acquired. Acquisition costs incurred are expensed through the statement of comprehensive loss.
Contingent consideration is measured at its acquisition date fair value and is included as part of the consideration transferred in a business combination, subject to the applicable terms and conditions. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with IFRS 9 Financial Instruments with the corresponding gain or loss recognized in profit or loss.
Based on the facts and circumstances that existed at the acquisition date, management will perform a valuation analysis to allocate the purchase price based on the fair values of the identifiable assets acquired and liabilities assumed on the acquisition date. Management has one year from the acquisition date to confirm and finalize the facts and circumstances that support the finalized fair value analysis and related purchase price allocation. Until such time, these values are provisionally reported and are subject to change. Changes to fair values and allocations are retrospectively adjusted in subsequent periods.
In determining the fair value of all identifiable assets acquired and liabilities assumed, the most significant estimates generally relate to contingent consideration, intangible assets and property, plant and equipment. Management exercises judgment in estimating the probability and timing of when earn-out milestones are expected to be achieved, which is used as the basis for estimating fair value. Identified intangible assets are fair valued using appropriate valuation techniques which are generally based on a forecast of the total expected future net cash flows of the acquiree. Valuations are highly dependent on the inputs used and assumptions made by management regarding the future performance of these assets and any changes in the discount rate applied. Property, plant and equipment are fair valued using a combination of the cost approach and sales comparison approach. The significant assumptions used were the replacement costs and rate per acre in the fair value measurement of the acquired land and replacement cost per square foot in the fair value measurement of the acquired buildings.
Acquisitions that do not meet the definition of a business combination are accounted for as asset acquisitions. Consideration paid for an asset acquisition is allocated to the individual identifiable assets acquired and liabilities assumed based on their relative fair values. Asset acquisitions do not give rise to goodwill.
|
Provisional allocation at acquisition | Adjustments | Final | |||||||||
Cash paid | 38,844 | — | 38,844 | ||||||||
Performance holdback | 2,153 | — | 2,153 | ||||||||
Indemnity holdback | 3,000 | — | 3,000 | ||||||||
Contingent consideration | 749 | — | 749 | ||||||||
44,746 | — | 44,746 | |||||||||
Preliminary Fair Value of net identifiable assets | |||||||||||
Cash | 54 | — | 54 | ||||||||
Accounts receivables | 3,317 | — | 3,317 | ||||||||
Biological assets | 4,873 | (403) | 4,470 | ||||||||
Inventories | 4,366 | — | 4,366 | ||||||||
Prepaid expenses and deposits | 749 | — | 749 | ||||||||
Property, plant and equipment | 92,887 | — | 92,887 | ||||||||
Intangible assets | — | ||||||||||
Customer relationships | 5,600 | — | 5,600 | ||||||||
Software | 247 | — | 247 | ||||||||
112,093 | (403) | 111,690 | |||||||||
Accounts payable and accruals | 3,699 | — | 3,699 | ||||||||
Income taxes payable | 1,660 | (1,744) | (84) | ||||||||
Deferred revenue | 151 | — | 151 | ||||||||
Loans and borrowings | 39,934 | (237) | 39,697 | ||||||||
Deferred tax liability | 14,762 | 1,509 | 16,271 | ||||||||
60,206 | (472) | 59,734 | |||||||||
Provisional purchase price allocation | |||||||||||
Net identifiable assets acquired | 51,887 | 69 | 51,956 | ||||||||
Non-controlling interest | (25,891) | (34) | (25,925) | ||||||||
Goodwill | 18,750 | (35) | 18,715 | ||||||||
44,746 | — | 44,746 | |||||||||
Net cash outflows | |||||||||||
Cash consideration paid | (38,844) | — | (38,844) | ||||||||
Cash acquired | 54 | — | 54 | ||||||||
(38,790) | — | (38,790) |
Provisional allocation at acquisition | Adjustments | Final | |||||||||
Total consideration | |||||||||||
Cash paid | 26,983 | — | 26,983 | ||||||||
Common shares issued | 9,230 | — | 9,230 | ||||||||
Common shares issuable | 9,683 | — | 9,683 | ||||||||
Indemnity holdback | 3,000 | — | 3,000 | ||||||||
Contingent consideration | 14,371 | — | 14,371 | ||||||||
63,267 | — | 63,267 | |||||||||
Net identifiable assets acquired (liabilities assumed) | |||||||||||
Cash | 2,513 | — | 2,513 | ||||||||
Accounts receivables | 3,713 | — | 3,713 | ||||||||
Biological assets | 232 | — | 232 | ||||||||
Inventories | 10,441 | — | 10,441 | ||||||||
Prepaid expenses and deposits | 151 | — | 151 | ||||||||
Investments in associates | 1,156 | — | 1,156 | ||||||||
Property, plant equipment | 10,453 | — | 10,453 | ||||||||
Intangible assets | — | ||||||||||
Permits and licenses | 6,100 | — | 6,100 | ||||||||
Brand | 10,800 | — | 10,800 | ||||||||
45,559 | — | 45,559 | |||||||||
Accounts payable and accruals | 5,831 | 750 | 6,581 | ||||||||
Deferred tax liability | 2,862 | — | 2,862 | ||||||||
8,693 | 750 | 9,443 | |||||||||
Provisional purchase price allocation | |||||||||||
Net identifiable assets acquired | 36,866 | (750) | 36,116 | ||||||||
Goodwill | 26,401 | 750 | 27,151 | ||||||||
63,267 | — | 63,267 | |||||||||
Net cash outflows | |||||||||||
Cash consideration paid | (26,983) | — | (26,983) | ||||||||
Cash acquired | 2,513 | — | 2,513 | ||||||||
(24,470) | — | (24,470) |
Accounting Policy
Non-controlling interests (“NCI”) are recognized either at fair value or at the NCI’s proportionate share of the acquiree’s net assets, determined on an acquisition-by-acquisition basis. For each acquisition, the excess of the total consideration, the fair value of previously held equity interests held prior to obtaining control and the NCI in the acquiree, over the fair value of the identifiable net asset acquired, is recorded as goodwill.
|
Bevo | Other | Total | |||||||||
$ | $ | $ | |||||||||
Balance, June 30, 2021 | — | — | — | ||||||||
Additions | — | 866 | 866 | ||||||||
Share of (loss) profit for the period | — | (355) | (355) | ||||||||
Balance, June 30, 2022 |
— | 511 | 511 | ||||||||
Acquired through business acquisitions (Note 13) |
25,925 | — | 25,925 | ||||||||
Change in ownership interests in net assets | 11,923 | — | 11,923 | ||||||||
Share of (loss) profit for the period | (4,944) | (2,354) | (7,298) | ||||||||
Balance, March 31, 2023 |
32,904 | (1,843) | 31,061 |
Accounting Policy
Intangible assets
Intangible assets are recorded at cost less accumulated amortization and any impairment losses. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Amortization of definite life intangibles is calculated on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any, over the following terms:
| ||||||||
Customer relationships Health Canada licenses Other operating licenses Patents IP and Know-how ERP Software |
20 years Useful life of the facility 10 years 10 years 10 years 5 years |
|||||||
The estimated useful lives, residual values and amortization methods are reviewed annually and any changes in estimates are accounted for prospectively. Intangible assets with an indefinite life or not yet available for use are not subject to amortization.
Research costs are expensed as incurred. Development expenditures are capitalized only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Company intends to and has sufficient resources to complete development to use or sell the asset. Other development expenditures are recognized as research and development expenses on the consolidated statement of comprehensive loss as incurred. Capitalized deferred development costs are internally generated intangible assets.
Goodwill
Goodwill represents the excess of the purchase price paid for the acquisition of an entity over the fair value of the net tangible and intangible assets acquired. Goodwill is allocated to the cash generating unit (“CGU”) or group of CGUs which are expected to benefit from the synergies of the combination. Goodwill is not subject to amortization.
Impairment of intangible assets and goodwill
Goodwill and intangible assets with an indefinite life or not yet available for use are tested for impairment annually at year-end, and whenever events or circumstances that make it more likely than not that an impairment may have occurred, such as a significant adverse change in the business climate or a decision to sell or dispose all or a portion of a reporting unit. Finite life intangible assets are tested whenever there is an indication of impairment.
Goodwill and indefinite life intangible assets are tested annually at year end for impairment by comparing the carrying value of each CGU containing the assets to its recoverable amount. Indefinite life intangible assets are tested for impairment by comparing the carrying value of each CGU containing the assets to its recoverable amount. Goodwill is tested for impairment based on the level at which it is monitored by management, and not at a level higher than an operating segment. The Company’s goodwill is allocated to the Plant Propagation operating segment, which represents the lowest level at which management monitors goodwill. The allocation of goodwill to the CGUs or group of CGUs requires the use of judgment.
An impairment loss is recognized for the amount by which the operating segment or CGU’s carrying amount exceeds it recoverable amount. The recoverable amounts of the CGUs’ assets have been determined based on the higher of fair value less costs of disposal and value-in-use. There is a material degree of uncertainty with respect to the estimates of the recoverable amounts of the CGU, given the necessity of making key economic assumptions about the future. Impairment losses recognized in respect of a CGU are first allocated to the carrying value of goodwill and any excess is allocated to the carrying value of assets in the CGU. Any impairment is recorded in profit and loss in the period in which the impairment is identified. A reversal of an asset impairment loss is allocated to the assets of the CGU on a pro rata basis. In allocating a reversal of an impairment loss, the carrying amount of an asset shall not be increased above the lower of its recoverable amount and the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior period. Impairment losses on goodwill are not subsequently reversed.
|
March 31, 2023 | June 30, 2022 | |||||||||||||||||||||||||
Cost | Accumulated amortization | Impairment | Net book value | Cost | Accumulated amortization | Impairment | Net book value | |||||||||||||||||||
Definite life intangible assets: | ||||||||||||||||||||||||||
Customer relationships | 42,529 | (37,068) | — | 5,461 | 89,626 | (48,975) | (40,651) | — | ||||||||||||||||||
Permits and licenses | 56,782 | (42,826) | (2,783) | 11,173 | 116,966 | (38,888) | (63,724) | 14,354 | ||||||||||||||||||
Patents | 928 | (771) | — | 157 | 1,957 | (777) | (1,053) | 127 | ||||||||||||||||||
Intellectual property and know-how | 52,590 | (52,590) | — | — | 78,099 | (49,878) | (28,221) | — | ||||||||||||||||||
Software | 20,121 | (16,390) | (3,460) | 271 | 42,639 | (16,618) | (26,021) | — | ||||||||||||||||||
Indefinite life intangible assets: | ||||||||||||||||||||||||||
Brand | 36,200 | — | (15,500) | 20,700 | 157,499 | — | (121,300) | 36,199 | ||||||||||||||||||
Permits and licenses | 21,918 | — | — | 21,918 | 23,973 | — | (3,957) | 20,016 | ||||||||||||||||||
Total intangible assets | 231,068 | (149,645) | (21,743) | 59,680 | 510,759 | (155,136) | (284,927) | 70,696 | ||||||||||||||||||
Goodwill | 19,465 | — | (750) | 18,715 | 914,275 | — | (914,275) | — | ||||||||||||||||||
Total | 250,533 | (149,645) | (22,493) | 78,395 | 1,425,034 | (155,136) | (1,199,202) | 70,696 |
Balance, June 30, 2022 |
Additions from acquisitions | Additions | Amortization | Impairment | Foreign currency translation | Balance, March 31, 2023 | |||||||||||||||||
Definite life intangible assets: | |||||||||||||||||||||||
Customer relationships | — | 5,600 | — | (139) | — | — | 5,461 | ||||||||||||||||
Permits and licenses | 14,354 | — | — | (498) | (2,783) | 100 | 11,173 | ||||||||||||||||
Patents | 127 | — | 41 | (20) | — | 9 | 157 | ||||||||||||||||
Software | — | 247 | 3,520 | (36) | (3,460) | — | 271 | ||||||||||||||||
Indefinite life intangible assets: |
|||||||||||||||||||||||
Brand | 36,199 | — | — | — | (15,499) | — | 20,700 | ||||||||||||||||
Permits and licenses (1) |
20,016 | — | — | — | — | 1,902 | 21,918 | ||||||||||||||||
Total intangible assets | 70,696 | 5,847 | 3,561 | (693) | (21,742) | 2,011 | 59,680 | ||||||||||||||||
Goodwill | — | — | 19,465 | — | (750) | — | 18,715 | ||||||||||||||||
Total | 70,696 | 5,847 | 23,026 | (693) | (22,492) | 2,011 | 78,395 |
Indefinite Life Intangible Impairment Testing |
Goodwill Impairment Testing | ||||||||||||||||||||||
Canadian Cannabis CGU | Plant Propagation | European Cannabis CGU | Canadian Cannabis Operating Segment | Plant Propagation | European Cannabis Operating Segment | ||||||||||||||||||
March 31, 2023 | |||||||||||||||||||||||
Terminal value growth rate | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% | |||||||||||||||||
Discount rate | 16.5% | 11.0% | 17.0% | 16.5% | 11.0% | 17.0% | |||||||||||||||||
Budgeted revenue growth rate over forecast period | 16.7% | 10.0% | 48.8% | 16.5% | 10.0% | 48.8% | |||||||||||||||||
Fair value less cost to dispose | $258,228 | $184,832 | $78,612 | $236,345 | $184,832 | $87,420 | |||||||||||||||||
Canadian Cannabis CGU | Plant Propagation | International Cannabis CGU | Cannabis Operating Segment | Plant Propagation | European Cannabis Operating Segment | ||||||||||||||||||
June 30, 2022 | |||||||||||||||||||||||
Terminal value growth rate | 3.0% | n/a | 3.0% | 3.0% | n/a | 3.0% | |||||||||||||||||
Discount rate | 15.0% | n/a | 16.0% | 15.0% | n/a | 16.0% | |||||||||||||||||
Budgeted revenue growth rate over forecast period | 18.1% | n/a | 23.1% | 18.2% | n/a | 23.7% | |||||||||||||||||
Fair value less cost to dispose | $319,828 | n/a | $48,052 | $264,829 | n/a | $69,021 |
Accounting Policy
Convertible debentures are financial instruments which are accounted for separately dependent on the nature of their components: a financial liability and an equity instrument. The identification of such components embedded within a convertible debenture requires significant judgment given that it is based on the interpretation of the substance of the contractual arrangement. Where the conversion option has a fixed conversion rate, the financial liability, which represents the obligation to pay coupon interest on the convertible debentures in the future, is initially measured at its fair value and subsequently measured at amortized cost. The residual amount is accounted for as an equity instrument at issuance. Where the conversion option has a variable conversion rate, the conversion option is recognized as a derivative liability measured at fair value through profit and loss. The residual amount is recognized as a financial liability and subsequently measured at amortized cost. The determination of the fair value is also an area of significant judgment given that it is subject to various inputs, assumptions and estimates including: contractual future cash flows, discount rates, credit spreads and volatility.
Transaction costs are apportioned to the debt liability and equity components in proportion to the allocation of proceeds.
|
$ | |||||
Balance, June 30, 2021 | 327,931 | ||||
Interest paid | (25,667) | ||||
Accretion | 33,171 | ||||
Accrued interest | 22,457 | ||||
Debt repurchased | (163,165) | ||||
Realized loss on debt repurchased | 19,353 | ||||
Unrealized loss on foreign exchange | 12,424 | ||||
Balance, June 30, 2022 | 226,504 | ||||
Current portion | (26,854) | ||||
Long-term portion | 199,650 | ||||
Balance, June 30, 2022 | 226,504 | ||||
Interest paid | (13,305) | ||||
Accretion | 16,123 | ||||
Accrued interest | 8,956 | ||||
Debt repurchased | (128,706) | ||||
Realized loss on debt repurchased | 10,874 | ||||
Unrealized loss on foreign exchange | 12,125 | ||||
Balance, March 31, 2023 | 132,571 | ||||
Current portion |
(132,571) | ||||
Long-term portion |
— |
Accounting Policy
Loans and Borrowings are initially recognized at fair value, net of transaction costs incurred. Loans are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss
over the period of the borrowings using the effective interest method. Loans are derecognized from the Consolidated Statement of Financial Position when the obligation specified in the contract is discharged, cancelled, or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss as finance costs. Loans are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period
|
Term loan credit facilities | |||||
$ | |||||
Balance, June 30, 2022 | — | ||||
Acquired through business combination (Note 13) |
39,697 | ||||
Drawings | 7,242 | ||||
Accretion | 1,846 | ||||
Interest payments | (1,504) | ||||
Principal repayments | (1,547) | ||||
Balance, March 31, 2023 |
45,734 | ||||
Current portion | (9,571) | ||||
Long-term portion | 36,163 | ||||
$ | |||||
Next 12 months | 9,571 | ||||
Over 1 year to 3 years | 2,636 | ||||
Over 3 years to 5 years | 6,758 | ||||
Over 5 years | 26,769 | ||||
Total long-term debt repayments | 45,734 |
Accounting Policy
The Company assesses whether a contract is or contains a lease at inception of the contract. A lease is recognized as a right-of-use asset and corresponding liability at the commencement date. Each lease payment included in the lease liability is apportioned between the repayment of the liability and a finance cost. The finance cost is recognized in “finance and other costs” in the consolidated statement of comprehensive loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability. Lease liabilities represent the net present value of fixed lease payments (including in-substance fixed payments); variable lease payments based on an index, rate, or subject to a fair market value renewal condition; amounts expected to be payable by the lessee under residual value guarantees; the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and payments of penalties for terminating the lease, if it is probable that the lessee will exercise that option.
The Company’s lease liability is recognized net of lease incentives receivable. The lease payments are discounted using the interest rate implicit in the lease or, if that rate cannot be determined, the lessee’s incremental borrowing rate. The period over which the lease payments are discounted is the expected lease term, including renewal and termination options that the Company is reasonably certain to exercise.
Subsequently, if there is a change to the expected lease term within the control of the lessee, the lease liability will be remeasured using the updated term and revised discount rate on a prospective basis.
Payments associated with short-term leases and leases of low-value assets are recognized as an expense on a straight-line basis in general and administration and sales and marketing expense in the consolidated statement of comprehensive loss. Short-term leases are defined as leases with a lease term of 12 months or less. Variable lease payments that do not depend on an index, rate, or subject to a fair market value renewal condition are expensed as incurred and recognized in costs of goods sold, general and administration, or sales and marketing expense, as appropriate given how the underlying leased asset is used, in the consolidated statements of comprehensive loss.
If the right-of-use asset is subsequently leased to a third party (a “sublease”), the Company will assess the classification of the sublease as to whether it is a finance or operating lease. Subleases that are classified as an operating lease will recognize lease income, while a financing lease will recognize a lease receivable and derecognize the carrying value of the right-of-use asset, with the difference recorded in profit or loss.
|
$ | ||||||||
Balance, June 30, 2021 | 71,619 | |||||||
Lease additions | 1,736 | |||||||
Disposal of leases | (6,139) | |||||||
Lease payments | (10,025) | |||||||
Net lease term reduction and other items (1) |
(17,534) | |||||||
Changes due to foreign exchange rates | (103) | |||||||
Interest expense on lease liabilities | 3,433 | |||||||
Balance, June 30, 2022 | 42,987 | |||||||
Current portion | (6,150) | |||||||
Long-term portion | 36,837 | |||||||
Balance, June 30, 2022 | 42,987 | |||||||
Lease additions | 555 | |||||||
Disposal of leases | (272) | |||||||
Lease payments | (6,709) | |||||||
Net lease term increase and other items (1) |
10,166 | |||||||
Changes due to foreign exchange rates | 244 | |||||||
Interest expense on lease liabilities | 2,246 | |||||||
Balance, March 31, 2023 | 49,217 | |||||||
Current portion | (5,413) | |||||||
Long-term portion | 43,804 |
Accounting Policy
Share Purchase Warrants
Warrants issued in foreign currencies are classified as derivative liabilities. Upon exercise, in exchange for a fixed amount of common shares, the expected cash receivable is variable due to changes in foreign exchange rates. The Company measures derivative financial liabilities at fair value through profit or loss at initial recognition and in subsequent reporting periods. Fair value gains or losses are recognized in other (losses) gains on the statement of comprehensive income. The fair value of foreign currency share purchase warrants is determined using the quoted market price on the valuation date, which is a Level 1 input. Transaction costs, which are directly attributable to the offering, are allocated to equity and classified as equity financing transaction costs.
|
US$ equivalence | ||||||||||||||||||||
Nine months ended March 31, 2023 | Year Ended June 30, 2022 |
Nine months ended March 31, 2023 | Year Ended June 30, 2022 |
|||||||||||||||||
Gross proceeds | $ | 75,568 | $ | 143,887 | $ | 55,381 | $ | 113,838 | ||||||||||||
Commission | $ | 1,422 | $ | 2,878 | $ | 1,107 | $ | 2,276 | ||||||||||||
Net proceeds | $ | 74,146 | $ | 141,009 | $ | 54,274 | $ | 111,562 | ||||||||||||
Average gross price | $ | 1.68 | $ | 5.50 | $ | 1.23 | $ | 4.35 | ||||||||||||
Number of shares issued | 44,986,253 | 26,161,388 |
Warrants | Weighted average exercise price |
|||||||
# | $ | |||||||
Balance, June 30, 2022 | 89,124,788 | 6.72 | ||||||
Balance, March 31, 2023 | 89,124,788 | 7.09 |
US$ equivalent | |||||||||||||||||||||||||||||
November 2020 Offering | January 2021 Offering | June 2022 Offering |
Total | November 2020 Offering | January 2021 Offering | June 2022 Offering |
Total | ||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Balance, June 30, 2021 | 59,162 | 29,698 | — | 88,860 | 47,726 | 23,958 | — | 71,684 | |||||||||||||||||||||
Additions | — | — | 35,621 | 35,621 | — | — | 28,164 | 28,164 | |||||||||||||||||||||
Unrealized losses on derivative liability | (55,148) | (28,167) | (3,869) | (87,184) | (44,613) | (22,770) | (3,520) | (70,903) | |||||||||||||||||||||
Balance, June 30, 2022 | 4,014 | 1,531 | 31,752 | 37,297 | 3,113 | 1,188 | 24,644 | 28,945 | |||||||||||||||||||||
Unrealized losses on derivative liability | (3,939) | (1,486) | (22,238) | (27,663) | (3,059) | (1,155) | (17,603) | (21,817) | |||||||||||||||||||||
Balance, March 31, 2023 |
75 | 45 | 9,514 | 9,634 | 54 | 33 | 7,041 | 7,128 | |||||||||||||||||||||
Exercise Price ($) | Expiry Date | Warrants (#) | ||||||
4.38 - 41.88 (2) |
January 26, 2024 - November 30, 2025 | 88,596,596 | ||||||
112.46 - 116.09 (1) |
August 9, 2023 to August 22, 2024 | 528,192 | ||||||
89,124,788 |
Accounting Policy
Stock Options
Stock options issued to employees are measured at fair value at the grant date and are recognized as an expense over the relevant vesting periods with a corresponding credit to share reserves.
Stock options issued to non-employees are measured at the fair value of goods or services received or the fair value of equity instruments issued, if it is determined that the fair value of the goods or services cannot be reliably measured. The fair value of non-employee stock options is recorded as an expense at the date the goods or services are received with a corresponding credit to share reserves.
Depending on the complexity of the stock option terms, the fair value of options is calculated using either the Black-Scholes option pricing model or the Binomial model. When determining the fair value of stock options, management is required to make certain assumptions and estimates related to expected lives, volatility, risk-free rate, future dividend yields and estimated forfeitures at the initial grant date.
The number of options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest. Upon the exercise of stock options, proceeds received from stock option holders are recorded as an increase to share capital and the related share reserve is transferred to share capital.
Restricted Share Units (“RSUs”) and Deferred Share Units (“DSUs”)
RSUs are equity-settled share-based payments. RSUs are measured at their intrinsic fair value on the date of grant based on the closing price of the Company’s shares on the date prior to the grant, and is recognized as share-based compensation expense over the vesting period with a corresponding credit to share reserves. Under IFRS, the Company’s DSUs are classified as equity-settled share-based payment transactions as they are settled in either cash or common shares at the sole discretion of Aurora. As such, the DSUs are measured in the same manner as RSUs.
The amount recognized for services received as consideration for the RSUs and DSUs granted is based on the number of equity instruments that eventually vest. Upon the release of RSUs and DSUs, the related share reserve is transferred to share capital.
Performance Share Units (“PSUs”)
PSUs are equity-settled share-based payments and have both a service and market condition. PSUs are measured at their fair value on the grant date and are recognized as share-based compensation expense over the vesting period with a corresponding credit to share reserves. The fair value of PSUs is calculated using the Monte Carlo model which factors in the probability of achieving the market-based performance target. When determining the fair value, management is required to make certain assumptions and estimates related to volatility, risk-free rate, equity correlations between Aurora and a peer group of companies, future stock prices, and estimated forfeitures. The amount recognized for services received as consideration for the PSUs granted is based on the number of equity instruments that eventually vest. Upon the release of PSUs, the related share reserve is transferred to share capital.
|
Stock Options |
Weighted Average
Exercise Price
|
|||||||
# | $ | |||||||
Balance, June 30, 2021 | 4,108,006 | 68.46 | ||||||
Granted | 1,335,514 | 9.53 | ||||||
Expired | (544,085) | 30.75 | ||||||
Forfeited | (620,152) | 73.19 | ||||||
Balance, June 30, 2022 | 4,279,283 | 53.97 | ||||||
Granted | 3,384,998 | 1.86 | ||||||
Expired | (277,885) | 90.53 | ||||||
Forfeited | (664,893) | 58.87 | ||||||
Balance, March 31, 2023 | 6,721,503 | 25.73 |
Exercise Price ($) | Expiry Date | Weighted Average Remaining Life | Options Outstanding (#) |
Options Exercisable (#) | ||||||||||
1.67 - 27.24 |
January 10, 2025 - September 30, 2027 | 4.00 | 5,453,045 | 1,521,559 | ||||||||||
38.52 - 99.60 |
April 12, 2023 - December 9, 2024 | 0.78 | 402,864 | 402,864 | ||||||||||
100.80 - 133.80 |
June 6, 2023 - July 12, 2024 | 2.49 | 797,429 | 797,429 | ||||||||||
135.00 - 163.56 |
September 25, 2023 - May 21, 2024 | 0.90 | 68,165 | 68,165 | ||||||||||
3.53 | 6,721,503 | 2,790,017 |
Nine months ended March 31, 2023 | Year ended June 30, 2022 | |||||||
Risk-free annual interest rate (1) |
3.70 | % | 0.95 | % | ||||
Expected annual dividend yield | N/A | — | % | |||||
Expected stock price volatility (2) |
86.86 | % | 84.21 | % | ||||
Expected life of options (years) (3) |
2.54 | 2.50 | ||||||
Forfeiture rate | 20.65 | % | 19.99 | % | ||||
RSUs and DSUs | Weighted Average Issue Price of RSUs and DSUs | |||||||
# | $ | |||||||
Balance, June 30, 2021 | 1,040,544 | 16.46 | ||||||
Issued | 761,029 | 6.98 | ||||||
Vested, released and issued | (362,774) | 21.01 | ||||||
Expired | (417) | 113.16 | ||||||
Forfeited | (123,848) | 10.35 | ||||||
Balance, June 30, 2022 | 1,314,534 | 10.26 | ||||||
Issued | 6,728,932 | 1.82 | ||||||
Vested, released and issued | (326,894) | 14.25 | ||||||
Expired | (14,099) | 27.34 | ||||||
Forfeited | (177,533) | 4.77 | ||||||
Balance, March 31, 2023 | 7,524,940 | 2.64 |
Weighted Average Issue Price ($) | Expiry Date | Outstanding (#) | Vested (#) | ||||||||
0.93 - $8.50 |
Nov 3, 2023 - Nov 15, 2025 | 7,262,564 | 956,981 | ||||||||
10.09 - 24.96 |
Feb 10, 2023 - Feb 10, 2025 | 258,247 | 123,078 | ||||||||
$90.12 - $113.16 |
N/A | 4,129 | 4,129 | ||||||||
7,524,940 | 1,084,188 | ||||||||||
PSUs | Weighted Average Issue Price of PSUs | |||||||
# | $ | |||||||
Balance, June 30, 2021 | 387,369 | 10.06 | ||||||
Issued | 441,233 | 7.81 | ||||||
Vested, released and issued | (12,723) | 8.22 | ||||||
Forfeited | (121,508) | 9.31 | ||||||
Balance, June 30, 2022 | 694,371 | 10.26 | ||||||
Issued | 1,734,746 | 1.87 | ||||||
Vested, released and issued | (3,626) | 2.16 | ||||||
Forfeited | (117,270) | 5.44 | ||||||
Balance, March 31, 2023 | 2,308,221 | 3.77 |
Weighted Average Issue Price ($) | Expiry Date | Outstanding (#) | Vested (#) | ||||||||
$1.87 - $10.09 |
Sep 10, 2023 - Nov 15, 2025 | 2,304,942 | 560 | ||||||||
$13.35 - $23.96 |
Dec 8, 2023 - Feb 11, 2024 | 3,279 | — | ||||||||
2,308,221 | 560 | ||||||||||
Nine months ended March 31, 2023 | Year ended June 30, 2022 | |||||||
Risk-free annual interest rate (1) |
3.99 | % | 1.23 | % | ||||
Dividend yield | — | % | — | % | ||||
Expected stock price volatility (2) |
94.04 | % | 38.23 | % | ||||
Expected stock price volatility of peer group (2) |
86.71 | % | 28.74 | % | ||||
Expected life of options (years) (3) |
3.00 | 3.00 | ||||||
Forfeiture rate | 16.98 | % | 10.30 | % | ||||
Equity correlation against peer group (4) |
49.74 | % | 47.51 | % | ||||
Accounting Policy
The Company calculates basic (loss) earnings per share by dividing net (loss) income by the weighted average number of common shares outstanding during the period. Diluted (loss) earnings per share is determined by adjusting profit or loss attributable to common shareholders and the weighted average number of common shares outstanding, for the effects of all dilutive potential common shares, which comprise convertible debentures, RSU, DSU, warrants and share options issued.
|
Nine months ended March 31, 2023 | Year ended June 30, 2022 | |||||||
Net loss attributable to Aurora shareholders | ($198,997) | ($1,717,624) | ||||||
Weighted average number of Common Shares outstanding | 322,735,165 | 214,912,605 | ||||||
Basic loss per share | ($0.62) | ($7.99) |
Nine months ended March 31, 2023 | Year ended June 30, 2022 | ||||||||||
$ | $ | ||||||||||
Share of net income from investment in associates | 8 | 33 | (293) | ||||||||
Loss on extinguishment of derivative investment | 6(a) | — | (9,096) | ||||||||
Unrealized loss on derivative investments | 7(b) | (15,796) | (19,951) | ||||||||
Unrealized gain on derivative liability | 19(c) | 27,663 | 90,263 | ||||||||
Unrealized gain (loss) on changes in contingent consideration fair value | 29 | 5,238 | (5) | ||||||||
Gain (loss) on disposal of assets held for sale and property, plant and equipment | 12 | (914) | 373 | ||||||||
Contract termination fee | 26(b) | (2,750) | — | ||||||||
Government grant income | 5 | — | 10,757 | ||||||||
Provisions | (4,145) | (3,372) | |||||||||
Realized loss on repurchase of convertible debt | 16 | (10,874) | (19,353) | ||||||||
Other losses | (3,564) | (2,235) | |||||||||
Total other (losses) gains | (5,109) | 47,088 |
Nine months ended March 31, 2023 | Year ended June 30, 2022 | |||||||
$ | $ | |||||||
Accounts receivable | 5,528 | 18,335 | ||||||
Biological assets | (52,447) | (78,000) | ||||||
Inventory | 49,028 | 99,068 | ||||||
Prepaid and other current assets | (16,373) | 2,675 | ||||||
Accounts payable and accrued liabilities | (8,064) | 6,765 | ||||||
Income taxes payable | 98 | 331 | ||||||
Deferred revenue | (1,612) | (319) | ||||||
Provisions | (1,282) | 2,213 | ||||||
Other current liabilities | 8 | 1,584 | ||||||
Changes in operating assets and liabilities | (25,116) | 52,652 |
Nine months ended March 31, 2023 | Year ended June 30, 2022 | |||||||
$ | $ | |||||||
Property, plant and equipment in accounts payable |
(193) | 910 | ||||||
Right-of-use asset additions | 555 | 1,340 | ||||||
Amortization of prepaids | 19,901 | 33,511 | ||||||
Interest paid |
16,933 | 27,725 | ||||||
Interest received |
(1,949) | 379 |
Accounting Policy
Tax expense recognized in profit or loss comprises the sum of current and deferred taxes not recognized in other comprehensive (loss) income or equity.
Current tax assets and liabilities
Current tax assets and/or liabilities comprise those claims from, or obligations to, fiscal authorities relating to the current or prior reporting periods that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted at the end of the reporting period. Current tax assets arise when the amount paid for taxes exceeds the amount due for the current and prior periods.
Deferred tax assets and liabilities
Deferred taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective periods of realization, provided they are enacted or substantively enacted at the end of the reporting period. Deferred tax liabilities are always provided for in full.
Deferred tax assets are recognized to the extent that it is probable that they will be able to be utilized against future taxable income. Deferred tax assets and liabilities are offset only when the Company has a right and intention to offset current tax assets and liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognized as a component of tax income or expense in profit or loss, except where they relate to items that are recognized in other comprehensive income or equity, in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively.
Significant estimates are required in determining the Company’s provision for income taxes and uncertain tax positions. Some of these estimates are based on interpretations of existing tax laws or regulations. Various internal and external factors may have favorable or unfavorable effects on the Company’s future effective tax rate. These factors include, but are not limited to, changes in tax laws, regulations and/or rates, changing interpretations of existing tax laws or regulations, changes in estimates of prior years’ items, results of tax audits by tax authorities, future levels of research and development spending, changes in estimates related to repatriation of undistributed earnings of foreign subsidiaries, and changes in overall levels of pre-tax earnings. The realization of the Company’s deferred tax assets is primarily dependent on whether the Company is able to generate sufficient capital gains and taxable income prior to expiration of any loss carry forward balance. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. The assessment of whether or not a valuation allowance is required often requires significant judgment with regard to management’s assessment of the long-range forecast of future taxable income and the evaluation of tax planning initiatives. Adjustments to the deferred tax valuation allowances are made to earnings in the period when such assessments are made.
The Company records tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available at the reporting date. There is inherent uncertainty in quantifying income tax positions. The Company has recorded tax benefits for those tax positions where it is more likely than not that a tax benefit will result upon ultimate settlement with a tax authority that has all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will result, no tax benefit has been recognized in the consolidated financial statements.
|
March 31, 2023 | June 30, 2022 | |||||||
$. | $ | |||||||
Income (loss) before tax | (221,532) | (1,720,120) | ||||||
Combined federal and provincial rate | 27.0 | % | 27.0 | % | ||||
Expected tax recovery | (59,814) | (464,432) | ||||||
Change in estimates from prior year | (23) | 401 | ||||||
Foreign exchange | (2,637) | 1,381 | ||||||
Non-deductible expenses | 5,715 | 9,033 | ||||||
Non-deductible (non-taxable) portion of capital items | (7,469) | (19,518) | ||||||
Goodwill and other impairment items | 612 | 246,177 | ||||||
Tax impact on divestitures | 3,076 | — | ||||||
Difference in statutory tax rate | 6,655 | 24,346 | ||||||
Effect of change in tax rates | (99) | (385) | ||||||
Changes in deferred tax benefits not recognized | 38,747 | 200,856 | ||||||
Income tax recovery | (15,237) | (2,141) |
Balance, June 30, 2022 | Deferred tax assets (liabilities) assumed from acquisition | Recovered through (charged to) earnings | Recovered through (charged to) other comprehensive income |
Recovered through (charged to) equity | Balance, March 31, 2023 | |||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||
Deferred tax assets | ||||||||||||||||||||
Non-capital losses | 24,691 | 839 | 5,924 | 965 | (516) | 31,903 | ||||||||||||||
Capital Losses | — | — | 142 | — | — | 142 | ||||||||||||||
Finance costs | 10 | 133 | (25) | — | 118 | |||||||||||||||
Investment tax credit | 1,282 | — | — | — | — | 1,282 | ||||||||||||||
Property, plant and equipment | — | — | — | — | — | — | ||||||||||||||
Derivatives | 26 | — | — | — | — | 26 | ||||||||||||||
Leases | 8,718 | — | (2,228) | 39 | — | 6,529 | ||||||||||||||
Others | 5,538 | — | (5,537) | — | — | 1 | ||||||||||||||
Total deferred tax assets | 40,265 | 972 | (1,724) | 1,004 | (516) | 40,001 | ||||||||||||||
Deferred tax liabilities | ||||||||||||||||||||
Convertible debenture | (11,896) | — | 8,494 | — | — | (3,402) | ||||||||||||||
Marketable securities | — | — | — | — | — | — | ||||||||||||||
Investment in associates | (8) | — | (4) | — | — | (12) | ||||||||||||||
Derivatives | — | — | — | — | — | — | ||||||||||||||
Intangible assets | (10,920) | (1,581) | 449 | (572) | — | (12,624) | ||||||||||||||
Property, plant and equipment | (4,969) | (15,304) | 4,427 | (419) | — | (16,265) | ||||||||||||||
Inventory | (11,648) | — | 6,441 | (11) | — | (5,218) | ||||||||||||||
Biological assets | (3,686) | (407) | 2,025 | (2) | — | (2,070) | ||||||||||||||
Others | — | 49 | (1,704) | — | — | (1,655) | ||||||||||||||
Total deferred tax liabilities | (43,127) | (17,243) | 20,128 | (1,004) | — | (41,246) | ||||||||||||||
Net deferred tax liabilities | (2,862) | (16,271) | 18,404 | — | (516) | (1,245) |
Balance, June 30, 2021 | (Charged to) / recovered through earnings (restatement) | Recovered through (charged to) earnings | Recovered through (charged to) other comprehensive income |
Recovered through (charged to) equity | Balance, Jun 30, 2022 | |||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||
Deferred tax assets | ||||||||||||||||||||
Non-capital losses | 110,085 | 3,062 | (85,288) | (975) | (2,193) | 24,691 | ||||||||||||||
Capital losses | 451 | — | (451) | — | — | — | ||||||||||||||
Finance costs | 813 | — | (803) | — | — | 10 | ||||||||||||||
Investment tax credit | 1,471 | — | (189) | — | — | 1,282 | ||||||||||||||
Derivatives | 734 | — | (708) | — | — | 26 | ||||||||||||||
Leases | 14,937 | — | (6,219) | — | — | 8,718 | ||||||||||||||
Others | 5,455 | — | 83 | — | — | 5,538 | ||||||||||||||
Total deferred tax assets | 133,946 | 3,062 | (93,575) | (975) | (2,193) | 40,265 | ||||||||||||||
Deferred tax liabilities | ||||||||||||||||||||
Convertible debenture | (29,627) | — | 17,731 | — | — | (11,896) | ||||||||||||||
Investment in associates | 1,409 | (1) | (1,416) | — | — | (8) | ||||||||||||||
Derivatives | (393) | — | 393 | — | — | — | ||||||||||||||
Intangible assets | (78,900) | (4,478) | 71,880 | 578 | — | (10,920) | ||||||||||||||
Property, plant and equipment | (15,239) | (558) | 10,398 | 430 | — | (4,969) | ||||||||||||||
Inventory | (8,296) | (857) | (2,466) | (29) | — | (11,648) | ||||||||||||||
Biological assets | (2,900) | (30) | (752) | (4) | — | (3,686) | ||||||||||||||
Others | — | — | — | — | — | — | ||||||||||||||
Total deferred tax liabilities | (133,946) | (5,924) | 95,768 | 975 | — | (43,127) | ||||||||||||||
Net deferred tax liabilities | — | (2,862) | 2,193 | — | (2,193) | (2,862) |
March 31, 2023 | June 30, 2022 | |||||||
$ | $ | |||||||
Deferred tax assets | 15,500 | — | ||||||
Deferred tax liabilities | (16,745) | (2,862) | ||||||
Net deferred tax liabilities | (1,245) | (2,862) |
March 31, 2023 | June 30, 2022 | |||||||
$ | $ | |||||||
Non-capital losses carried forward | 1,267,104 | 1,159,836 | ||||||
Investment in associates | 1,240 | 47,983 | ||||||
Capital losses | 186,093 | 135,259 | ||||||
Property, plant, and equipment | 581,993 | 584,013 | ||||||
Intangible assets | 60,219 | 37,953 | ||||||
Goodwill | 31,728 | 32,755 | ||||||
Marketable Securities | 25,075 | 23,744 | ||||||
Investment tax credits | 6,696 | 5,021 | ||||||
Derivatives | 22,164 | 12,722 | ||||||
Capital lease obligations | 15,970 | 1,553 | ||||||
Other | 56,776 | 37,365 | ||||||
2,255,058 | 2,078,204 |
Accounting Policy
The Company considers a person or entity as a related party if they are a member of key management personnel including their close relatives, an associate or joint venture, those having significant influence over the Company, as well as entities that are under common control or controlled by related parties.
|
Nine months ended | Year ended | |||||||
March 31, 2023 | June 30, 2022 | |||||||
$ | $ | |||||||
Short-term employment benefits (1) |
5,454 | 7,109 | ||||||
Long-term employment benefits | 31 | — | ||||||
Termination benefit | 489 | 308 | ||||||
Directors’ fees (2) |
273 | 335 | ||||||
Share-based compensation (3) |
8,886 | 11,026 | ||||||
Total management compensation (4) |
15,133 | 18,778 | ||||||
Nine months ended | Year ended | |||||||
March 31, 2023 | June 30, 2022 | |||||||
$ | $ | |||||||
Production costs (1) |
2,546 | 4,310 | ||||||
March 31, 2023 | June 30, 2022 | |||||||
$ | $ | |||||||
Production costs with investments in associates (1) |
(79) | 439 | ||||||
Accounting Policy
The Company generates revenue primarily from the sale of cannabis, cannabis related products, plant propagation and provision of services. The Company uses the following five-step contract-based analysis of transactions to determine if, when and how much revenue can be recognized:
1. Identify the contract with a customer;
2. Identify the performance obligation(s) in the contract;
3. Determine the transaction price;
4. Allocate the transaction price to the performance obligation(s) in the contract; and
5. Recognize revenue when or as the Company satisfies the performance obligation(s).
Revenue from the sale of cannabis is generally recognized when control over the goods has been transferred to the customer. Payment for medical sales is typically due prior to shipment. Payment for wholesale transactions is due within a specified time period as permitted by the underlying agreement and the Company’s credit policy upon the transfer of goods to the customer. The Company generally satisfies its performance obligation and transfers control to the customer upon delivery and acceptance by the customer. Revenue is recorded at the estimated amount of consideration to which the Company expects to be entitled.
Revenue from plant propagation is recognized at a point in time when control of the goods is transferred to the customer, at an amount which reflects the consideration to which the Company expects to be entitled to in exchange for those goods. The Company goods consist of propagation seedlings and bedding plants. The sale is completed upon delivery as the Company bears the responsibility of transportation and related costs.
For bill-and-hold arrangements, revenue is recognized before delivery but only upon transfer of control of the good to the customer. Control is transferred to the customer when the substance of the bill-and-hold arrangement is substantive, the Company cannot sell the goods to another customer, the goods can be identified separately and are ready for physical transfer to the customer.
Service revenues, including patient referral services, are recognized over a period of time as performance obligations are completed. Payment of the transaction price for patient counselling is typically due prior to the services being rendered and therefore, the transaction price is recognized as a contract liability, or deferred revenue, when payment is received. Contract liabilities are subsequently recognized into revenue as or when the Company fulfills its performance obligation.
Effective October 17, 2018, Canada Revenue Agency (“CRA”) began levying an excise tax on the sale of medical and consumer cannabis products. The Company becomes liable for these excise duties when cannabis products are delivered to the customer. The excise taxes payable is the higher of (i) a flat-rate duty which is imposed when a cannabis product is packaged, and (ii) an advalorem duty that is imposed when a cannabis product is delivered to the customer. Effective May 1, 2019, excise tax calculated on edible cannabis products, cannabis extracts and cannabis topicals will prospectively be calculated as a flat rate based on the quantity of total tetrahydrocannabinol (THC) contained in the final product. There were no changes in the legislation in calculating excise taxes for fresh cannabis, dried cannabis, seeds and plants. Where the excise tax has been billed to customers, the Company has reflected the excise tax as part of revenue in accordance with IFRS 15. Net revenue from sale of goods, as presented on the consolidated statements of comprehensive (loss) income, represents revenue from the sale of goods less applicable excise taxes. Given that the excise tax payable/paid to CRA cannot be reclaimed and is not always billed to customers, the Company recognizes that the excise tax is an operating cost that affects gross margin to the extent that it is not recovered from its customers.
For certain sale of goods in which the Company earns a manufacturing fee, the Company records net revenue as an agent on the basis that the Company does not control pricing or bear inventory or credit risk.
|
Nine months ended March 31, 2023 | Point-in-time | Over-time | Total | ||||||||
$ | $ | $ | |||||||||
Cannabis | |||||||||||
Revenue from sale of goods | 174,815 | — | 174,815 | ||||||||
Revenue from provision of services | — | 1,088 | 1,088 | ||||||||
Excise taxes | (21,617) | — | (21,617) | ||||||||
Cannabis net revenue | 153,198 | 1,088 | 154,286 | ||||||||
Plant propagation | |||||||||||
Revenue from sale of goods | 20,682 | — | 20,682 | ||||||||
Net revenue | 173,880 | 1,088 | 174,968 |
Year ended June 30, 2022 | Point-in-time | Over-time | Total | ||||||||
$ | $ | $ | |||||||||
Cannabis | |||||||||||
Revenue from sale of goods | 251,607 | — | 251,607 | ||||||||
Revenue from provision of services | — | 1,696 | 1,696 | ||||||||
Excise taxes | (31,964) | — | (31,964) | ||||||||
Net revenue | 219,643 | 1,696 | 221,339 |
Accounting Policy
Operating segments are components of the Company that engage in business activities which generate revenues and incur expenses (including intercompany revenues and expenses related to transactions conducted with other components of the Company). The operations of an operating segment are distinct and the operating results are regularly reviewed by the chief operating decision maker (“CODM”) for the purposes of resource allocation decisions and assessing its performance. Reportable segments are Operating segments whose revenues or profit/loss or total assets exceed ten percent or more of those of the combined entity.
Key measures used by the CODM to assess performance and make resource allocation decisions include revenues, gross profit and net (loss) income. The Company’s operating results are divided into three reportable segments plus corporate. The three reportable segments are (i) Canadian Cannabis; (ii) EU Cannabis and (iii) Plant Propagation
|
Operating Segments | Canadian Cannabis | EU Cannabis | Plant Propagation | Corporate (1) |
Total |
||||||||||||
$ | $ | $ | $ | ||||||||||||||
Nine months ended March 31, 2023 | |||||||||||||||||
Net revenue | 129,918 | 24,369 | 20,681 | — | 174,968 | ||||||||||||
Gross profit (loss) before fair value adjustments | 12,174 | 10,616 | 1,343 | 24,133 | |||||||||||||
Selling, general, and administrative expense | 94,364 | 12,147 | 14,344 | 1,784 | 122,639 | ||||||||||||
Loss before taxes | (156,199) | (23,162) | (39,245) | (2,926) | (221,532) | ||||||||||||
Year ended June 30, 2022 | |||||||||||||||||
Net revenue | 159,923 | 61,372 | — | 44 | 221,339 | ||||||||||||
Gross profit (loss) before fair value adjustments | (23,411) | 32,015 | — | 22 | 8,626 | ||||||||||||
Selling, general and administrative expense | 140,469 | 17,541 | — | 17,227 | 175,237 | ||||||||||||
Loss before taxes | (1,559,855) | (14,124) | — | (146,141) | (1,720,120) |
Geographical Segments | Canada | EU | Other | Total | ||||||||||
$ | $ | $ | $ | |||||||||||
Non-current assets | ||||||||||||||
March 31, 2023 | 375,179 | 41,866 | 105 | 417,150 | ||||||||||
June 30, 2022 | 267,438 | 41,080 | — | 308,518 | ||||||||||
Nine months ended March 30, 2023 | ||||||||||||||
Net revenue | 150,599 | 24,369 | — | 174,968 | ||||||||||
Gross profit (loss) before fair value adjustments | 13,517 | 10,616 | — | 24,133 | ||||||||||
Year ended June 30, 2022 | ||||||||||||||
Net revenue | 159,819 | 61,520 | — | 221,339 | ||||||||||
Gross profit (loss) before fair value adjustments | (23,640) | 32,266 | — | 8,626 |
Accounting Policy
Fair Value Hierarchy
Financial instruments recorded at fair value are classified using a hierarchy that categorizes into three levels the inputs to valuation techniques used to measure fair value. The three levels of hierarchy are:
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 - Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; and
Level 3 - Inputs for the asset or liability that are not based on observable market data.
The individual fair values attributed to the different components of a financing transaction, notably marketable securities, derivative financial instruments, convertible debentures and loans, are determined using valuation techniques. The Company uses judgment to select the methods used to make certain assumptions and derive estimates. Significant judgment is also used when attributing fair values to each component of a transaction upon initial recognition, measuring fair values for certain instruments on a recurring basis and disclosing the fair values of financial instruments subsequently carried at amortized cost. These valuation estimates could be significantly different because of the use of judgment and the inherent uncertainty in estimating the fair value of instruments that are not quoted or observable in an active market.
Financial instruments are measured either at fair value or at amortized cost. The table below lists the valuation methods used to determine fair value of each financial instrument.
|
|||||||||||
Fair Value Method |
|||||||||||
Financial Instruments Measured at Fair Value | |||||||||||
Marketable securities | Closing market price of common shares as of the measurement date (Level 1) |
||||||||||
Derivatives | Closing market price (Level 1) or Black-Scholes, Binomial, Monte-Carlo & FINCAD valuation model (Level 2 or 3) |
||||||||||
Contingent consideration payable | Discounted cash flow model (Level 3) |
||||||||||
Derivative liability | Closing market price of warrants (Level 1) or Kynex valuation model (Level 2) | ||||||||||
Financial Instruments Measured at Amortized Cost | |||||||||||
Cash and cash equivalents, restricted cash, accounts receivable, loans receivable | Carrying amount (approximates fair value due to short-term nature) |
||||||||||
Accounts payable and accrued liabilities, other current and long-term liabilities | Carrying amount (approximates fair value due to short-term nature) |
||||||||||
Lease receivable, convertible debentures, loans and borrowings, and lease liabilities. | Carrying value discounted at the effective interest rate approximates fair value |
||||||||||
Thrive | Bevo | Other | Total | |||||||||||
$ | $ | $ | $ | |||||||||||
Balance, June 30, 2021 | — | — | 250 | 250 | ||||||||||
Additions |
14,371 | — | — | 14,371 | ||||||||||
Unrealized gain (loss) from changes in fair value | — | — | — | — | ||||||||||
Payments |
— | — | (250) | (250) | ||||||||||
Balance, June 30, 2022 | 14,371 | — | — | 14,371 | ||||||||||
Additions |
451 | 2,902 | — | 3,353 | ||||||||||
Unrealized gain (loss) from changes in fair value | (4,882) | (355) | — | (5,237) | ||||||||||
Payments |
— | — | — | — | ||||||||||
Balance, March 31, 2023 | 9,940 | 2,547 | — | 12,487 |
Amortized cost | FVTPL | Designated FVTOCI |
Total | |||||||||||
$ | $ | $ | $ | |||||||||||
Financial Assets |
||||||||||||||
Cash and cash equivalents |
234,942 | — | — | 234,942 | ||||||||||
Restricted cash |
65,900 | — | — | 65,900 | ||||||||||
Accounts receivable, excluding sales taxes and lease receivable | 38,000 | — | — | 38,000 | ||||||||||
Derivatives |
— | 7,249 | — | 7,249 | ||||||||||
Loans receivable | — | — | — | — | ||||||||||
Lease receivable | 8,590 | — | — | 8,590 | ||||||||||
Financial Liabilities |
||||||||||||||
Accounts payable and accrued liabilities |
75,825 | — | — | 75,825 | ||||||||||
Convertible debentures | 132,571 | — | — | 132,571 | ||||||||||
Contingent consideration payable |
— | 12,487 | — | 12,487 | ||||||||||
Other current liabilities | 12,572 | — | — | 12,572 | ||||||||||
Lease liabilities | 49,217 | — | — | 49,217 | ||||||||||
Derivative liability | — | 9,634 | — | 9,634 | ||||||||||
Loans and borrowings | 45,734 | — | — | 45,734 | ||||||||||
Other long-term liabilities | 48,047 | — | — | 48,047 |
Note | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
$ | $ | $ | $ | ||||||||||||||
As at March 31, 2023 | |||||||||||||||||
Derivative assets | 7(b) | — | 7,114 | 135 | 7,249 | ||||||||||||
Contingent consideration payable | — | — | 12,487 | 12,487 | |||||||||||||
Derivative liability | 16, 19(c) | 9,634 | — | — | 9,634 | ||||||||||||
As at June 30, 2022 | |||||||||||||||||
Marketable securities | 7(a) | 1,331 | — | — | 1,331 | ||||||||||||
Derivative assets | 7(b) | — | 9,860 | 16,423 | 26,283 | ||||||||||||
Contingent consideration payable | — | — | 14,371 | 14,371 | |||||||||||||
Derivative liability | 16, 19(c) | 37,297 | — | — | 37,297 |
March 31, 2023 | June 30, 2022 | |||||||
$ | $ | |||||||
0 – 60 days | 28,355 | 23,763 | ||||||
61+ days | 6,661 | 4,902 | ||||||
35,016 | 28,665 |
Note | March 31, 2023 | |||||||
$ | ||||||||
Next 12 months | 2,480 | |||||||
Over 1 year to 2 years | 2,396 | |||||||
Over 2 years to 3 years | 1,522 | |||||||
Over 3 years to 4 years | 1,417 | |||||||
Over 4 years to 5 years | 1,127 | |||||||
Thereafter | 817 | |||||||
Total undiscounted lease payments receivable | 9,759 | |||||||
Unearned finance income | (1,169) | |||||||
Total lease receivable | 8,590 | |||||||
Current | 4 | (2,094) | ||||||
Long-term | 6,496 |
March 31, 2023 | June 30, 2022 | |||||||
$ | $ | |||||||
Trade payables | 21,942 | 13,858 | ||||||
Accrued liabilities | 38,176 | 34,810 | ||||||
Payroll liabilities | 12,610 | 18,851 | ||||||
Excise tax payable | 2,611 | 960 | ||||||
Other payables | 486 | 1,395 | ||||||
75,825 | 69,874 |
Total | ≤1 year | Over 1 year - 3 years | Over 3 years - 5 years | > 5 years | |||||||||||||
$ | $ | $ | $ | $ | |||||||||||||
Accounts payable and accrued liabilities | 75,825 | 75,825 | — | — | — | ||||||||||||
Convertible notes and interest (1)(2) |
148,451 | 148,451 | — | — | — | ||||||||||||
Lease liabilities (2) |
98,731 | 8,548 | 21,812 | 15,505 | 52,866 | ||||||||||||
Loans and borrowings | 45,734 | 9,571 | 2,636 | 6,758 | 26,769 | ||||||||||||
Contingent consideration payable (3) |
12,487 | — | 9,942 | 2,545 | — | ||||||||||||
Business acquisition retention payments | 3,797 | 3,797 | — | — | — | ||||||||||||
385,025 | 246,192 | 34,390 | 24,808 | 79,635 |
Business Overview |
|||||
Condensed Statement of Comprehensive Loss |
|||||
Key Quarterly Financial and Operating Results |
|||||
Key Developments During and Subsequent to Three Months Ended March 31, 2023 |
|||||
Financial Review |
|||||
Critical Accounting Estimates
|
|||||
Change in Accounting Policies | |||||
Historical Quarterly Results
|
|||||
Internal Controls Over Financial Reporting |
|||||
Cautionary Statement Regarding Forward-Looking Statements |
|||||
Cautionary Statement Regarding Certain Non-GAAP Performance Measures |
2 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
3 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
4 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
Three months ended |
9 months ended | Year ended | |||||||||||||||
($ thousands) |
March 31, 2023 | December 31, 2022 | March 31, 2022 | March 31, 2023 | June 30, 2022 |
||||||||||||
Net revenue (1a) |
$64,026 | $61,679 | $50,434 | $174,968 | $221,339 | ||||||||||||
Gross profit (loss) before FV adjustments (1b) |
$20,578 | $2,116 | ($10,003) | $24,133 | $8,626 | ||||||||||||
Gross (loss) profit | $18,653 | ($16,170) | ($14,189) | $775 | $21,225 | ||||||||||||
Operating expenses | $51,336 | $55,426 | $58,192 | $158,878 | $252,674 | ||||||||||||
Loss from operations | ($32,683) | ($71,596) | ($72,381) | ($158,103) | ($231,449) | ||||||||||||
Other income (expense) | ($57,704) | $4,315 | ($939,996) | ($63,429) | ($1,488,671) | ||||||||||||
Net loss | ($87,225) | ($67,183) | ($1,012,175) | ($206,295) | ($1,717,979) |
($ thousands, except Operational Results) | Q3 2023 | Q3 2022 | $ Change | % Change | Q2 2023 | $ Change | % Change | ||||||||||||||||
Financial Results | |||||||||||||||||||||||
Total net revenue (1)(2a) |
$64,026 | $50,434 | $13,592 | 27 | % | $61,679 | $2,347 | 4 | % | ||||||||||||||
Medical cannabis net revenue (1)(2a) |
$37,986 | $39,359 | ($1,373) | (3 | %) | $39,514 | ($1,528) | (4 | %) | ||||||||||||||
Consumer cannabis net revenue (1)(2a) |
$14,491 | $10,339 | $4,152 | 40 | % | $14,647 | ($156) | (1 | %) | ||||||||||||||
Plant propagation net revenue (1)(2a) |
$10,754 | $— | $10,754 | 100 | % | $6,630 | $4,124 | 62 | % | ||||||||||||||
Adjusted gross margin before FV adjustments on total net revenue (2b) |
48 | % | 54 | % | N/A | (6 | %) | 45 | % | N/A | 3 | % | |||||||||||
Adjusted gross margin before FV adjustments on core cannabis net revenue (2b) |
51 | % | 57 | % | N/A | (6 | %) | 49 | % | N/A | 2 | % | |||||||||||
Adjusted gross margin before FV adjustments on medical cannabis net revenue (2b) |
60 | % | 64 | % | N/A | (4 | %) | 61 | % | N/A | (1 | %) | |||||||||||
Adjusted gross margin before FV adjustments on consumer cannabis net revenue (2b) |
25 | % | 29 | % | N/A | (4 | %) | 20 | % | N/A | 5 | % | |||||||||||
Adjusted gross margin before FV adjustments on plant propagation net revenue (2b) |
36 | % | — | % | N/A | 36 | % | 15 | % | N/A | 21 | % | |||||||||||
Adjusted SG&A expense(2d)(5) |
$28,351 | $35,637 | ($7,286) | (20 | %) | $25,428 | $2,923 | 11 | % | ||||||||||||||
Adjusted R&D expense(2d) |
$1,987 | $2,637 | ($650) | (25 | %) | $1,217 | $770 | 63 | % | ||||||||||||||
Adjusted EBITDA (2c)(5) |
$310 | ($10,018) | $10,328 | 103 | % | $1,428 | ($1,118) | (78 | %) | ||||||||||||||
Balance Sheet | |||||||||||||||||||||||
Working capital (2e,f) |
$237,622 | $577,566 | ($339,944) | (59 | %) | $409,729 | ($172,107) | (42) | % | ||||||||||||||
Cannabis inventory and biological assets (3) |
$93,081 | $118,729 | ($25,648) | (22 | %) | $93,675 | ($594) | (1) | % | ||||||||||||||
Total assets | $926,322 | $1,570,252 | ($643,930) | (41 | %) | $1,023,835 | ($97,513) | (10) | % | ||||||||||||||
Operational Results – Cannabis | |||||||||||||||||||||||
Average net selling price of dried cannabis excluding bulk sales (2g) |
$4.75 | $5.41 | ($0.66) | (12 | %) | $4.79 | ($0.04) | (1) | % | ||||||||||||||
Kilograms sold (4) |
16,578 | 9,722 | 6,856 | 71 | % | 15,269 | 1,309 | 9 | % |
5 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
6 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
($ thousands) |
Three months ended |
Nine months ended | Year ended | ||||||||||||||
March 31, 2023 | December 31, 2022 | March 31, 2022(3) |
March 31, 2023 | June 30, 2022(3) |
|||||||||||||
Medical cannabis net revenue(1) |
|||||||||||||||||
Canadian medical cannabis net revenue | 24,180 | 25,752 | 24,775 | 73,330 | 100,738 | ||||||||||||
International medical cannabis revenue | 13,806 | 13,762 | 13,884 | 35,735 | 63,598 | ||||||||||||
International medical cannabis revenue provisions | — | — | 700 | — | (1,675) | ||||||||||||
Total international medical cannabis net revenue | 13,806 | 13,762 | 14,584 | 35,735 | 61,923 | ||||||||||||
Total medical cannabis net revenue | 37,986 | 39,514 | 39,359 | 109,065 | 162,661 | ||||||||||||
Consumer cannabis net revenue(1) |
|||||||||||||||||
Consumer cannabis net revenue | 14,750 | 16,652 | 11,418 | 45,827 | 61,332 | ||||||||||||
Consumer cannabis net revenue provisions | (259) | (2,005) | (1,079) | (2,976) | (4,857) | ||||||||||||
Total consumer cannabis net revenue | 14,491 | 14,647 | 10,339 | 42,851 | 56,475 | ||||||||||||
Wholesale bulk cannabis net revenue(1) |
|||||||||||||||||
Core wholesale bulk cannabis net revenue | 307 | 664 | — | 971 | — | ||||||||||||
Non-core wholesale bulk cannabis net revenue | 488 | 224 | 736 | 1,400 | 2,207 | ||||||||||||
Wholesale bulk cannabis net revenue | 795 | 888 | 736 | 2,371 | 2,207 | ||||||||||||
Total cannabis net revenue | 53,272 | 55,049 | 50,434 | 154,287 | 221,343 | ||||||||||||
— | — | — | — | ||||||||||||||
Plant propagation revenue(2) |
10,754 | 6,630 | — | 20,681 | — | ||||||||||||
Total net revenue | 64,026 | 61,679 | 50,434 | 174,968 | 221,343 |
7 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
Three months ended | Nine months ended | Year ended | |||||||||||||||
($ thousands) | March 31, 2023 | December 31, 2022 | March 31, 2022 | March 31, 2023 | June 30, 2022 |
||||||||||||
Revenue from sale of goods | 70,959 | 69,165 | 56,490 | 195,497 | 251,607 | ||||||||||||
Revenue from provision of services | 213 | 513 | 377 | 1,088 | 1,696 | ||||||||||||
Excise taxes | (7,146) | (7,999) | (6,433) | (21,617) | (31,964) | ||||||||||||
Net revenue (1) |
64,026 | 61,679 | 50,434 | 174,968 | 221,339 | ||||||||||||
Cost of sales | (43,448) | (59,563) | (60,437) | (150,835) | (212,713) | ||||||||||||
Gross profit before FV adjustments (1) |
20,578 | 2,116 | (10,003) | 24,133 | 8,626 | ||||||||||||
Gross margin before FV adjustments (1) |
32 | % | 3 | % | (20 | %) | 14 | % | 4 | % | |||||||
Changes in fair value of inventory sold |
(8,638) | (24,586) | (42,927) | (57,487) | (106,072) | ||||||||||||
Unrealized gain on changes in fair value of biological assets | 6,713 | 6,300 | 38,741 | 34,129 | 118,671 | ||||||||||||
Gross profit (loss) | 18,653 | (16,170) | (14,189) | 775 | 21,225 | ||||||||||||
Gross margin | 29 | % | (26 | %) | (28 | %) | — | % | 10 | % | |||||||
8 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
($ thousands) |
Medical Cannabis |
Consumer Cannabis | Core Wholesale Bulk Cannabis | Total Core Cannabis | Non-Core Wholesale Bulk Cannabis |
Plant Propagation | Total |
||||||||||||||||
Three months ended March 31, 2023 |
|||||||||||||||||||||||
Gross revenue | 40,667 | 18,956 | 307 | 59,930 | 488 | 10,754 | 71,172 | ||||||||||||||||
Excise taxes | (2,681) | (4,465) | — | (7,146) | — | — | (7,146) | ||||||||||||||||
Net revenue (1) |
37,986 | 14,491 | 307 | 52,784 | 488 | 10,754 | 64,026 | ||||||||||||||||
Cost of sales | (20,041) | (14,556) | (173) | (34,770) | (646) | (8,032) | (43,448) | ||||||||||||||||
Depreciation | 2,453 | 1,773 | 21 | 4,247 | 77 | 877 | 5,201 | ||||||||||||||||
Inventory impairment, non-recurring, out-of-period and market development costs included in cost of sales (2)(3)(4)(7) |
2,555 | 1,912 | 25 | 4,492 | 96 | 233 | 4,821 | ||||||||||||||||
Adjusted gross profit (loss) before FV adjustments (1) |
22,953 | 3,620 | 180 | 26,753 | 15 | 3,832 | 30,600 | ||||||||||||||||
Adjusted gross margin before FV adjustments (1) |
60 | % | 25 | % | 59 | % | 51 | % | 3 | % | 36 | % | 48 | % | |||||||||
Three months ended December 31, 2022 | |||||||||||||||||||||||
Gross revenue | 42,340 | 19,820 | 664 | 62,824 | 224 | 6,630 | 69,678 | ||||||||||||||||
Excise taxes |
(2,826) | (5,173) | — | (7,999) | — | — | (7,999) | ||||||||||||||||
Net revenue(1) |
39,514 | 14,647 | 664 | 54,825 | 224 | 6,630 | 61,679 | ||||||||||||||||
Cost of sales | (26,380) | (22,673) | (1,013) | (50,066) | (1,417) | (8,080) | (59,563) | ||||||||||||||||
Depreciation | 2,055 | 1,560 | 68 | 3,683 | 95 | 843 | 4,621 | ||||||||||||||||
Inventory impairment, non-recurring, business transformation, and market development costs included in cost of sales (2)(3)(4)(5) |
8,855 | 9,370 | 436 | 18,661 | 609 | 1,578 | 20,848 | ||||||||||||||||
Adjusted gross profit (loss) before FV adjustments (1) |
24,044 | 2,904 | 155 | 27,103 | (489) | 971 | 27,585 | ||||||||||||||||
Adjusted gross margin before FV adjustments (1) |
61 | % | 20 | % | 23 | % | 49 | % | (218 | %) | 15 | % | 45 | % | |||||||||
Three months ended March 31, 2022 (6) |
|||||||||||||||||||||||
Gross revenue | 42,262 | 13,869 | — | 56,131 | 736 | — | 56,867 | ||||||||||||||||
Excise taxes | (2,903) | (3,530) | — | (6,433) | — | — | (6,433) | ||||||||||||||||
Net revenue(1) |
39,359 | 10,339 | — | 49,698 | 736 | — | 50,434 | ||||||||||||||||
Cost of sales | (31,275) | (23,242) | — | (54,517) | (5,920) | — | (60,437) | ||||||||||||||||
Depreciation | 4,198 | 2,165 | — | 6,363 | 482 | — | 6,845 | ||||||||||||||||
Inventory impairment and out-of-period adjustments included in cost of sales (2)(7) |
12,873 | 13,749 | — | 26,622 | 3,806 | — | 30,428 | ||||||||||||||||
Adjusted gross profit (loss) before FV adjustments (1) |
25,155 | 3,011 | — | 28,166 | (896) | — | 27,270 | ||||||||||||||||
Adjusted gross margin before FV adjustments (1) |
64 | % | 29 | % | — | % | 57 | % | (122 | %) | — | % | 54 | % |
9 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
10 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
($ thousands) |
Medical Cannabis |
Consumer Cannabis | Core Wholesale Bulk Cannabis | Core Cannabis | Non-Core Wholesale Bulk Cannabis |
Plant Propagation | Total |
||||||||||||||||
Nine months ended March 31, 2023 | |||||||||||||||||||||||
Gross revenue | 117,459 | 56,074 | 971 | 174,504 | 1,400 | 20,681 | 196,585 | ||||||||||||||||
Excise taxes | (8,394) | (13,223) | — | (21,617) | — | — | (21,617) | ||||||||||||||||
Net revenue (1) |
109,065 | 42,851 | 971 | 152,887 | 1,400 | 20,681 | 174,968 | ||||||||||||||||
Non-recurring revenue adjustments (4) |
— | (752) | — | (752) | — | — | (752) | ||||||||||||||||
Adjusted net revenue | 109,065 | 42,099 | 971 | 152,135 | 1,400 | 20,681 | 174,216 | ||||||||||||||||
Cost of sales | (67,860) | (58,098) | (1,186) | (127,144) | (4,354) | (19,337) | (150,835) | ||||||||||||||||
Depreciation | 6,601 | 5,269 | 89 | 11,959 | 362 | 2,163 | 14,484 | ||||||||||||||||
Inventory impairment, non-recurring, out-of-period, business transformation, and market development costs included in cost of sales (2)(3)(4)(5)(6) |
20,182 | 20,433 | 461 | 41,076 | 1,846 | 1,811 | 44,733 | ||||||||||||||||
Adjusted gross profit (loss) before FV adjustments (1) |
67,988 | 9,703 | 335 | 78,026 | (746) | 5,318 | 82,598 | ||||||||||||||||
Adjusted gross margin before FV adjustments (1) |
62 | % | 23 | % | 35 | % | 51 | % | (53 | %) | 26 | % | 47 | % | |||||||||
Year ended June 30, 2022 (7) |
|||||||||||||||||||||||
Gross revenue | 174,441 | 76,655 | — | 251,096 | 2,207 | — | 253,303 | ||||||||||||||||
Excise taxes | (11,780) | (20,184) | — | (31,964) | — | — | (31,964) | ||||||||||||||||
Net revenue (1) |
162,661 | 56,471 | — | 219,132 | 2,207 | — | 221,339 | ||||||||||||||||
Non-recurring revenue adjustments (4) |
— | 1,023 | — | 1,023 | — | — | 1,023 | ||||||||||||||||
Adjusted net revenue | 162,661 | 57,494 | — | 220,155 | 2,207 | — | 222,362 | ||||||||||||||||
Cost of sales | (108,060) | (91,446) | — | (199,506) | (13,207) | — | (212,713) | ||||||||||||||||
Depreciation | 18,886 | 13,976 | — | 32,862 | 1,575 | — | 34,437 | ||||||||||||||||
Inventory impairment, non-recurring, and out-of-period adjustments in cost of sales (2)(4)(5) |
29,614 | 35,912 | — | 65,526 | 6,036 | — | 71,562 | ||||||||||||||||
Adjusted gross (loss) profit before FV adjustments (1) |
103,101 | 15,936 | — | 119,037 | (3,389) | — | 115,648 | ||||||||||||||||
Adjusted gross margin before FV adjustments (1) |
63 | % | 28 | % | — | % | 54 | % | (154 | %) | — | % | 52 | % |
11 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
Three months ended | Nine months ended | Year ended | |||||||||||||||
($ thousands) | March 31, 2023 | December 31, 2022 | March 31, 2022 | March 31, 2023 | June 30, 2022 |
||||||||||||
General and administration | 26,679 | 27,112 | 23,696 | 83,164 | 113,212 | ||||||||||||
Sales and marketing | 13,494 | 13,174 | 15,934 | 39,475 | 62,025 | ||||||||||||
Acquisition costs | 696 | 3,028 | 585 | 5,638 | 4,689 | ||||||||||||
Research and development | 2,031 | 1,287 | 2,637 | 4,921 | 10,389 | ||||||||||||
Depreciation and amortization | 4,816 | 6,544 | 11,802 | 14,916 | 48,602 | ||||||||||||
Share-based compensation | 3,620 | 4,281 | 3,538 | 10,764 | 13,757 | ||||||||||||
Total operating expenses | 51,336 | 55,426 | 58,192 | 158,878 | 252,674 |
12 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
Three months ended | Nine months ended | Year ended | |||||||||||||||
($ thousands) | March 31, 2023 | December 31, 2022 | March 31, 2022 | March 31, 2023 | June 30, 2022 |
||||||||||||
Sales and marketing | 13,494 | 13,174 | 15,934 | 39,475 | 62,025 | ||||||||||||
General and administration | 26,679 | 27,112 | 23,696 | 83,164 | 113,212 | ||||||||||||
Business transformation costs | (7,209) | (11,249) | (2,035) | (27,328) | (11,801) | ||||||||||||
Out-of-period adjustments | (818) | (516) | (699) | (1,801) | (9,195) | ||||||||||||
Non-recurring costs | (2,837) | (2,179) | — | (6,154) | (1,127) | ||||||||||||
Market development costs | (958) | (914) | (1,259) | (2,935) | (5,205) | ||||||||||||
Adjusted SG&A (1) |
28,351 | 25,428 | 35,637 | 84,421 | 147,909 |
Three months ended | Nine months ended | Year ended | |||||||||||||||
($ thousands) | March 31, 2023 | December 31, 2022 | March 31, 2022 | March 31, 2023 | June 30, 2022 |
||||||||||||
Research and development | 2,031 | 1,287 | 2,637 | 4,921 | 10,389 | ||||||||||||
Share-based compensation | (44) | (70) | — | (300) | — | ||||||||||||
Adjusted R&D (1) |
1,987 | 1,217 | 2,637 | 4,621 | 10,389 |
13 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
($ thousands) |
Three months ended |
Nine months ended | Year ended | ||||||||||||||
March 31, 2023 | December 31, 2022 | March 31, 2022(5) |
March 31, 2023 | June 30, 2022 (5) |
|||||||||||||
Net loss from continuing operations | (87,225) | (67,183) | (1,012,175) | (206,295) | (1,717,979) | ||||||||||||
Income tax expense (recovery) | (3,162) | (98) | (202) | (15,237) | (2,141) | ||||||||||||
Other income (expense) | 57,704 | (4,315) | 939,996 | 63,429 | 1,488,671 | ||||||||||||
Share-based compensation | 3,620 | 4,281 | 3,538 | 10,764 | 13,757 | ||||||||||||
Depreciation and amortization | 10,017 | 11,165 | 18,647 | 29,400 | 83,067 | ||||||||||||
Acquisition costs | 696 | 3,028 | 585 | 5,638 | 4,689 | ||||||||||||
Inventory and biological assets fair value and impairment adjustments(6) |
6,477 | 34,265 | 31,239 | 69,026 | 52,518 | ||||||||||||
Business transformation related charges (1) |
7,253 | 11,893 | 2,125 | 28,202 | 11,891 | ||||||||||||
Out-of-period adjustments (2) |
1,333 | 516 | 4,074 | 2,316 | 11,779 | ||||||||||||
Non-recurring items (3) |
2,425 | 6,803 | 896 | 3,824 | 7,473 | ||||||||||||
Markets under development (4) |
1,172 | 1,073 | 1,259 | 3,308 | 5,205 | ||||||||||||
Adjusted EBITDA (5) |
310 | 1,428 | (10,018) | (5,625) | (41,070) |
14 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
($ thousands) |
March 31, 2023 | June 30, 2022 | June 30, 2021 | ||||||||
Cash and cash equivalents | 234,942 | 437,807 | 421,457 | ||||||||
Restricted cash | 65,900 | 50,972 | 19,394 | ||||||||
Marketable securities | — | 1,331 | 3,751 | ||||||||
Working capital (1) |
237,622 | 614,264 | 549,517 | ||||||||
Total assets | 926,322 | 1,084,356 | 2,604,731 | ||||||||
Total non-current liabilities | 166,880 | 291,145 | 450,656 | ||||||||
Capitalization | |||||||||||
Convertible notes | 132,571 | 226,504 | 327,931 | ||||||||
Loans and borrowings | 45,734 | — | — | ||||||||
Lease liabilities | 49,217 | 42,987 | 71,619 | ||||||||
Total debt | 227,522 | 269,491 | 399,550 | ||||||||
Total equity | 517,137 | 662,354 | 2,037,700 | ||||||||
Total capitalization | 744,659 | 931,845 | 2,437,250 |
15 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
$ | |||||
Next 12 months | 9,571 | ||||
Over 1 year to 2 years | 2,636 | ||||
Over 2 years to 5 years | 6,758 | ||||
Over 5 years | 26,769 | ||||
Total long-term debt repayments | 45,734 |
($ thousands) |
Three months ended | Nine months ended | Year ended | |||||||||||
March 31, 2023 | March 31, 2022 | March 31, 2023 | June 30, 2022 | |||||||||||
Cash used in operating activities | (24,035) | (38,967) | (115,821) | (110,267) | ||||||||||
Cash provided by (used in) investing activities | 137 | 12,490 | (27,291) | (36,171) | ||||||||||
Cash provided by (used in) financing activities | 609 | 126,914 | (71,406) | 147,779 | ||||||||||
Effect of foreign exchange | (478) | (2,947) | 11,653 | 15,009 | ||||||||||
Decrease in cash and cash equivalents | (23,767) | 97,490 | (202,865) | 16,350 |
16 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
($ thousands) | Total | ≤ 1 year | Over 1 year to 3 years | Over 3 years to 5 years | > 5 years | ||||||||||||
Accounts payable and accrued liabilities | 75,825 | 75,825 | — | — | — | ||||||||||||
Convertible notes and interest (1) |
148,451 | 148,451 | — | — | — | ||||||||||||
Lease liabilities (2) |
98,731 | 8,548 | 21,812 | 15,505 | 52,866 | ||||||||||||
Loans and borrowings, principal repayment | 45,734 | 9,571 | 2,636 | 6,758 | 26,769 | ||||||||||||
Contingent consideration payable (3) |
12,487 | — | 9,942 | 2,545 | — | ||||||||||||
Capital commitments (4) |
2,202 | 2,202 | — | — | — | ||||||||||||
Business acquisition retention payments | 3,797 | 3,797 | — | — | — | ||||||||||||
Total contractual obligations | 387,227 | 248,394 | 34,390 | 24,808 | 79,635 |
17 | AURORA CANNABIS INC. |
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18 | AURORA CANNABIS INC. |
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($ thousands) | Three months ended | Nine months ended | Year ended | |||||||||||
March 31, 2023 | June 30, 2022 | March 31, 2023 | June 30, 2022 | |||||||||||
$ | $ | $ | $ | |||||||||||
Short-term employment benefits (1) |
1,494 | 1,858 | 5,454 | 7,109 | ||||||||||
Long-term employment benefits | 13 | 13 | 31 | — | ||||||||||
Termination benefits | — | 308 | 489 | 308 | ||||||||||
Directors’ fees (2) |
103 | 85 | 273 | 335 | ||||||||||
Share-based compensation (3) |
3,207 | 2,600 | 8,886 | 11,026 | ||||||||||
Total management compensation (4) |
4,817 | 4,864 | 15,133 | 18,778 |
($ thousands) | Three months ended | Nine months ended | Year ended | |||||||||||
March 31, 2023 | June 30, 2022 | March 31, 2023 | June 30, 2022 | |||||||||||
Production costs (1) |
493 | 1,602 | 2,546 | 4,310 | ||||||||||
($ thousands) | March 31, 2023 | June 30, 2022 | ||||||
Production costs with investments in associates (1)(2) |
(79) | 439 | ||||||
19 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
Inputs and assumptions |
Description |
Correlation between inputs and fair value | ||||||
Average selling price per gram |
Represents the average selling price per gram of dried cannabis net of excise taxes, where applicable, for the period for all strains of cannabis sold, which is expected to approximate future selling prices. | If the average selling price per gram were higher (lower), estimated fair value would increase (decrease). | ||||||
Average attrition rate |
Represents the weighted average number of plants culled at each stage of production. | If the average attrition rate was lower (higher), estimated fair value would increase (decrease). | ||||||
Weighted average yield per plant |
Represents the weighted average number of grams of dried cannabis inventory expected to be harvested from each cannabis plant. | If the average yield per plant was higher (lower), estimated fair value would increase (decrease). | ||||||
Standard cost per gram to complete production |
Based on actual production costs incurred divided by the grams produced in the period. | If the standard cost per gram to complete production was lower (higher), estimated fair value would increase (decrease). | ||||||
Weighted average effective yield |
Represents the estimated loss in fair value due to harvested product not meeting specifications. |
If the weighted average effective yield were higher (lower), the estimated fair value would increase (decrease). |
||||||
Stage of completion in the production process |
Calculated by taking the weighted average number of days in production over a total average grow cycle of approximately twelve weeks. | If the number of days in production was higher (lower), estimated fair value would increase (decrease). |
20 | AURORA CANNABIS INC. |
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21 | AURORA CANNABIS INC. |
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22 | AURORA CANNABIS INC. |
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Fair Value Method | |||||
Financial Instruments Measured at Fair Value | |||||
Marketable securities | Closing market price of Common Shares as of the measurement date (Level 1) | ||||
Derivatives | Closing market price (Level 1) or Black-Scholes, Binomial, Monte-Carlo & FINCAD valuation model (Level 2 or 3) | ||||
Contingent consideration payable | Discounted cash flow model (Level 3) | ||||
Derivative liability | Closing market price of warrants (Level 1) or Kynex valuation model (Level 2) |
||||
Financial Instruments Measured at Amortized Cost | |||||
Cash and cash equivalents, restricted cash, accounts receivable, loans receivable |
Carrying amount (approximates fair value due to short-term nature) | ||||
Accounts payable and accrued liabilities, other current and long-term liabilities, loans and borrowings | Carrying amount (approximates fair value due to short-term nature) | ||||
Lease receivable, convertible debentures, loans and borrowings, and lease liabilities. | Carrying value discounted at the effective interest rate which approximates fair value |
($ thousands) | Amortized cost | FVTPL | Designated FVTOCI |
Total | ||||||||||
$ | $ | $ | $ | |||||||||||
Financial Assets |
||||||||||||||
Cash and cash equivalents |
234,942 | — | — | 234,942 | ||||||||||
Restricted cash |
65,900 | — | — | 65,900 | ||||||||||
Accounts receivable, excluding sales taxes and lease receivable | 38,000 | — | — | 38,000 | ||||||||||
Derivatives |
— | 7,249 | — | 7,249 | ||||||||||
Lease receivable | 8,590 | — | — | 8,590 | ||||||||||
Financial Liabilities |
||||||||||||||
Accounts payable and accrued liabilities |
75,825 | — | — | 75,825 | ||||||||||
Convertible debentures | 132,571 | — | — | 132,571 | ||||||||||
Contingent consideration payable |
— | 12,487 | — | 12,487 | ||||||||||
Other current liabilities | 12,572 | — | — | 12,572 | ||||||||||
Lease liabilities | 49,217 | — | — | 49,217 | ||||||||||
Derivative liability | — | 9,634 | — | 9,634 | ||||||||||
Loans and borrowings | 45,734 | — | — | 45,734 | ||||||||||
Other long-term liabilities | 48,047 | — | — | 48,047 |
Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities; | ||||
Level 2 | Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; and | ||||
Level 3 | Inputs for the asset or liability that are not based on observable market data. |
23 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
($ thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||
As at March 31, 2023 | ||||||||||||||
Derivative assets (1) |
— | 7,114 | 135 | 7,249 | ||||||||||
Contingent consideration payable | — | — | 12,487 | 12,487 | ||||||||||
Derivative liability (2) |
9,634 | — | — | 9,634 | ||||||||||
As at June 30, 2022 | ||||||||||||||
Marketable securities | 1,331 | — | — | 1,331 | ||||||||||
Derivative assets | — | 9,860 | 16,423 | 26,283 | ||||||||||
Contingent consideration payable | — | — | 14,371 | 14,371 | ||||||||||
Derivative liability | 37,297 | — | — | 37,297 |
($ thousands) |
March 31, 2023 | June 30, 2022 | ||||||
0 – 60 days | 28,355 | 23,763 | ||||||
61+ days | 6,661 | 4,902 | ||||||
35,016 | 28,665 |
24 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
($ thousands) | March 31, 2023 | |||||||
$ | ||||||||
Next 12 months | 2,480 | |||||||
Over 1 year to 2 years | 2,396 | |||||||
Over 2 years to 3 years | 1,522 | |||||||
Over 3 years to 4 years | 1,417 | |||||||
Over 4 years to 5 years | 1,127 | |||||||
Thereafter | 817 | |||||||
Total undiscounted lease payments receivable | 9,759 | |||||||
Unearned finance income | (1,169) | |||||||
Total lease receivable | 8,590 | |||||||
Current | (2,094) | |||||||
Long-term | 6,496 |
25 | AURORA CANNABIS INC. |
2023 ANNUAL REPORT |
Securities (1) |
Units Outstanding |
||||
Issued and outstanding Common Shares | 354,205,652 | ||||
Stock options | 6,258,773 | ||||
Warrants | 89,124,788 | ||||
Restricted share units | 5,905,930 | ||||
Deferred share units | 910,453 | ||||
Performance share units | 2,119,732 | ||||
Convertible debentures | 680,239 |
($ thousands, except earnings per share and Operational Results) | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | ||||||||||
Financial Results | ||||||||||||||
Net revenue (2) |
$64,026 | $61,679 | $49,263 | $50,215 | ||||||||||
Adjusted gross margin before FV adjustments on total net revenue (3) |
48 | % | 45 | % | 50 | % | 47 | % | ||||||
Loss from continuing operations attributable to common shareholders (4) |
($82,001) | ($65,392) | ($51,604) | ($618,787) | ||||||||||
Loss attributable to common shareholders | ($82,001) | ($65,392) | ($51,604) | ($618,787) | ||||||||||
Basic and diluted loss per share from continuing operations | ($0.24) | ($0.20) | ($0.17) | ($2.48) | ||||||||||
Basic and diluted loss per share | ($0.24) | ($0.20) | ($0.17) | ($2.48) | ||||||||||
Balance Sheet | ||||||||||||||
Working capital | $237,622 | $409,729 | $514,193 | $614,264 | ||||||||||
Cannabis inventory and biological assets (4) |
$93,081 | $93,675 | $121,776 | $127,836 | ||||||||||
Total assets | $926,322 | $1,023,835 | $1,169,927 | $1,084,356 | ||||||||||
Operational Results – Cannabis | ||||||||||||||
Average net selling price of dried cannabis (3) |
$4.75 | $4.79 | $5.32 | $5.10 | ||||||||||
Kilograms sold | 16,578 | 15,269 | 12,165 | 13,130 | ||||||||||
Q3 2022 | Q2 2022 | Q1 2022 | Q4 2021(1) |
|||||||||||
Financial Results | ||||||||||||||
Net revenue (2) |
$50,434 | $60,586 | $60,108 | $54,825 | ||||||||||
Adjusted gross margin before FV adjustments on total net revenue (3) |
54 | % | 53 | % | 54 | % | 54 | % | ||||||
Loss from continuing operations attributable to common shareholders (4) |
($1,012,177) | ($74,776) | ($11,884) | ($133,969) | ||||||||||
Loss from discontinued operations attributable to common shareholders | $— | $— | $— | ($1,179) | ||||||||||
Loss attributable to common shareholders | ($1,012,177) | ($74,776) | ($11,884) | ($135,148) | ||||||||||
Basic and diluted loss per share from continuing operations | ($4.72) | ($0.38) | ($0.06) | ($0.68) | ||||||||||
Basic and diluted loss per share | ($4.72) | ($0.38) | ($0.06) | ($0.68) | ||||||||||
Balance Sheet | ||||||||||||||
Working capital | $577,566 | $481,574 | $532,612 | $549,517 | ||||||||||
Cannabis inventory and biological assets (5) |
$118,729 | $139,625 | $139,103 | $120,297 | ||||||||||
Total assets | $1,570,252 | $2,485,384 | $2,560,316 | $2,604,731 | ||||||||||
Operational Results – Cannabis | ||||||||||||||
Average net selling price of dried cannabis (2)(3) |
$5.41 | $4.52 | $4.67 | $5.11 | ||||||||||
Kilograms sold | 9,722 | 13,043 | 12,484 | 11,346 |
26 | AURORA CANNABIS INC. |
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41 | AURORA CANNABIS INC. |
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($ thousands) | |||||
Total revenue | $20,681 | ||||
Net loss | $1,268 |
($ thousands) | |||||
Total Current Assets | $25,386 | ||||
Total Non-Current Assets(1) |
$39,869 | ||||
Total Current Liabilities | $21,207 | ||||
Total Non-Current Liabilities | $45,315 |
42 | AURORA CANNABIS INC. |
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44 | AURORA CANNABIS INC. |
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