EX-99.1 2 sndl-ex991_6.htm EX-99.1 sndl-ex991_6.htm

EXHIBIT 99.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sundial Growers Inc.

Condensed Consolidated Interim Financial Statements

For the three and nine months ended September 30, 2020

(Unaudited – expressed in thousands of Canadian dollars)

 

 

 

 


 

Sundial Growers Inc.

Condensed Consolidated Interim Statement of Financial Position

(Unaudited - expressed in thousands of Canadian dollars)

As at

Note

September 30, 2020

 

December 31, 2019

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

21,044

 

 

45,337

 

Restricted cash

 

 

5,330

 

 

15,827

 

Accounts receivable

5

 

14,449

 

 

27,638

 

Biological assets

6

 

4,492

 

 

14,309

 

Inventory

7

 

31,672

 

 

59,942

 

Prepaid expenses and deposits

 

 

7,260

 

 

9,564

 

Assets held for sale

8

 

2,998

 

 

 

 

 

 

87,245

 

 

172,617

 

Non-current assets

 

 

 

 

 

 

 

Long-term deposits

 

 

1,800

 

 

 

Property, plant and equipment

8

 

119,777

 

 

281,984

 

Intangible assets

9

 

18,182

 

 

43,995

 

Goodwill

10

 

 

 

11,440

 

Total assets

 

 

227,004

 

 

510,036

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

26,388

 

 

58,110

 

Current portion of long-term debt

11

 

71,063

 

 

177,913

 

Current portion of lease obligations

12

 

405

 

 

722

 

Derivative warrant liabilities

14

 

4,411

 

 

 

Contingent consideration

15

 

 

 

32,501

 

 

 

 

102,267

 

 

269,246

 

Non-current liabilities

 

 

 

 

 

 

 

Long-term debt

11

 

 

 

 

Lease obligations

12

 

1,136

 

 

16,227

 

Convertible notes

13

 

48,408

 

 

 

Deferred tax liability

 

 

 

 

3,365

 

Total liabilities

 

 

151,811

 

 

288,838

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

Share capital

16(b)

 

504,671

 

 

509,654

 

Warrants

16(c)

 

25,602

 

 

27,831

 

Contributed surplus

 

 

38,609

 

 

30,192

 

Contingent consideration

 

 

2,279

 

 

2,279

 

Accumulated deficit

 

 

(500,506

)

 

(360,338

)

Accumulated other comprehensive income

 

 

 

 

6,866

 

Total shareholders’ equity

 

 

70,655

 

 

216,484

 

Non-controlling interest

 

 

4,538

 

 

4,714

 

Total liabilities and shareholders’ equity

 

 

227,004

 

 

510,036

 

Going concern (note 1)

Commitments (note 25)

Subsequent events (notes 13 and 16b)

See accompanying notes to the condensed consolidated interim financial statements.

 

1


 

Sundial Growers Inc.

Condensed Consolidated Interim Statement of Loss and Comprehensive Loss

(Unaudited - expressed in thousands of Canadian dollars, except per share amounts)

 

 

 

 

Three months ended

September 30

 

 

Nine months ended

September 30

 

 

 

Note

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Gross revenue

 

18

 

 

15,525

 

 

 

28,690

 

 

 

56,456

 

 

 

50,665

 

Excise taxes

 

 

 

 

2,660

 

 

 

669

 

 

 

9,391

 

 

 

1,846

 

Net revenue

 

 

 

 

12,865

 

 

 

28,021

 

 

 

47,065

 

 

 

48,819

 

Cost of sales

 

7

 

 

10,259

 

 

 

20,250

 

 

 

41,102

 

 

 

31,462

 

Inventory obsolescence

 

7

 

 

19,897

 

 

 

 

 

 

37,638

 

 

 

 

Gross margin before fair value adjustments

 

 

 

 

(17,291

)

 

 

7,771

 

 

 

(31,675

)

 

 

17,357

 

Change in fair value of biological assets

 

 

 

 

194

 

 

 

11,675

 

 

 

4,853

 

 

 

24,541

 

Change in fair value realized through inventory

 

7

 

 

(2,447

)

 

 

(5,875

)

 

 

(18,352

)

 

 

(7,564

)

Gross margin

 

 

 

 

(19,544

)

 

 

13,571

 

 

 

(45,174

)

 

 

34,334

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

 

 

7,158

 

 

 

12,415

 

 

 

25,501

 

 

 

23,860

 

Sales and marketing

 

 

 

 

1,117

 

 

 

2,056

 

 

 

3,427

 

 

 

4,801

 

Research and development

 

 

 

 

35

 

 

 

196

 

 

 

378

 

 

 

2,047

 

Depreciation and amortization

 

8,9

 

 

1,480

 

 

 

143

 

 

 

3,414

 

 

 

411

 

Foreign exchange loss (gain)

 

 

 

 

(249

)

 

 

190

 

 

 

(1,204

)

 

 

136

 

Share-based compensation

 

17

 

 

3,118

 

 

 

7,991

 

 

 

7,065

 

 

 

34,145

 

Restructuring costs

 

 

 

 

1,108

 

 

 

 

 

 

6,190

 

 

 

 

Asset impairment

 

8

 

 

60,000

 

 

 

 

 

 

65,659

 

 

 

162

 

Government subsidies

 

19

 

 

(4,081

)

 

 

 

 

 

(4,081

)

 

 

 

Loss from operations

 

 

 

 

(89,230

)

 

 

(9,420

)

 

 

(151,523

)

 

 

(31,228

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transaction costs

 

 

 

 

(364

)

 

 

(6,315

)

 

 

(2,762

)

 

 

(6,315

)

Finance income (costs)

 

20

 

 

18,197

 

 

 

(10,150

)

 

 

11,624

 

 

 

(20,293

)

Loss on financial obligation

 

 

 

 

 

 

 

(59,583

)

 

 

 

 

 

(60,308

)

(Loss) gain on disposition of PP&E

 

 

 

 

 

 

 

(19

)

 

 

488

 

 

 

(4

)

Loss before income tax

 

 

 

 

(71,397

)

 

 

(85,487

)

 

 

(142,173

)

 

 

(118,148

)

Income tax recovery

 

 

 

 

 

 

 

 

 

 

 

 

 

3,609

 

Net loss from continuing operations

 

 

 

 

(71,397

)

 

 

(85,487

)

 

 

(142,173

)

 

 

(114,539

)

Net loss from discontinued operations

 

4

 

 

 

 

 

(12,004

)

 

 

(33,627

)

 

 

(12,004

)

Net loss

 

 

 

 

(71,397

)

 

 

(97,491

)

 

 

(175,800

)

 

 

(126,543

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) gain on translation of foreign operations

 

 

 

 

 

 

 

(3,869

)

 

 

600

 

 

 

(3,869

)

Comprehensive loss

 

 

 

 

(71,397

)

 

 

(101,360

)

 

 

(175,200

)

 

 

(130,412

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss from continuing operations attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sundial Growers Inc.

 

 

 

 

(71,386

)

 

 

(85,448

)

 

 

(141,997

)

 

 

(114,472

)

Non-controlling interest

 

 

 

 

(11

)

 

 

(39

)

 

 

(176

)

 

 

(67

)

 

 

 

 

 

(71,397

)

 

 

(85,487

)

 

 

(142,173

)

 

 

(114,539

)

Net loss attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sundial Growers Inc.

 

 

 

 

(71,386

)

 

 

(97,452

)

 

 

(175,624

)

 

 

(126,476

)

Non-controlling interest

 

 

 

 

(11

)

 

 

(39

)

 

 

(176

)

 

 

(67

)

 

 

 

 

 

(71,397

)

 

 

(97,491

)

 

 

(175,800

)

 

 

(126,543

)

Comprehensive loss attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sundial Growers Inc.

 

 

 

 

(71,386

)

 

 

(101,321

)

 

 

(175,024

)

 

 

(130,345

)

Non-controlling interest

 

 

 

 

(11

)

 

 

(39

)

 

 

(176

)

 

 

(67

)

 

 

 

 

 

(71,397

)

 

 

(101,360

)

 

 

(175,200

)

 

 

(130,412

)

Net loss per common share attributable to Sundial Growers Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

21

 

$

(0.53

)

 

$

(1.06

)

 

$

(1.51

)

 

$

(1.61

)

See accompanying notes to the condensed consolidated interim financial statements.

 

2


 

Sundial Growers Inc.

Condensed Consolidated Interim Statement of Changes in Shareholders’ Equity

(Unaudited - expressed in thousands of Canadian dollars)

 

Note

Share capital

 

Warrants

 

Contributed

surplus

 

Contingent consideration

 

Accumulated deficit

 

Accumulated

other

comprehensive

income

 

Non-

controlling

interest

 

Total equity

 

Balance at December 31, 2019

 

 

509,654

 

 

27,831

 

 

30,192

 

 

2,279

 

 

(360,338

)

 

6,866

 

 

4,714

 

 

221,198

 

Net loss

 

 

 

 

 

 

 

 

 

 

(175,624

)

 

 

 

(176

)

 

(175,800

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

600

 

 

 

 

600

 

Share issuances

16(b)

 

15,232

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,232

 

Share issuance costs

 

 

(1,818

)

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,818

)

Convertible debt - conversions

13

 

11,912

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,912

 

Derivative warrants exercised

14

 

8,087

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,087

 

Warrants expired

16(c)

 

 

 

(2,229

)

 

2,229

 

 

 

 

 

 

 

 

 

 

 

Dispositions

4

 

(38,447

)

 

 

 

 

 

 

 

35,456

 

 

(7,466

)

 

 

 

(10,457

)

Share-based compensation

17

 

51

 

 

 

 

6,188

 

 

 

 

 

 

 

 

 

 

6,239

 

Balance at September 30, 2020

 

 

504,671

 

 

25,602

 

 

38,609

 

 

2,279

 

 

(500,506

)

 

 

 

4,538

 

 

75,193

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2020

 

 

471,868

 

 

27,831

 

 

33,262

 

 

2,279

 

 

(429,120

)

 

 

 

4,549

 

 

110,669

 

Net loss

 

 

 

 

 

 

 

 

 

 

(71,386

)

 

 

 

(11

)

 

(71,397

)

Share issuances

16(b)

 

14,622

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,622

 

Share issuance costs

 

 

(1,818

)

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,818

)

Convertible debt - conversions

13

 

11,912

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,912

 

Derivative warrants exercised

14

 

8,087

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,087

 

Warrants expired

16(c)

 

 

 

(2,229

)

 

2,229

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

17

 

 

 

 

 

3,118

 

 

 

 

 

 

 

 

 

 

3,118

 

Balance at September 30, 2020

 

 

504,671

 

 

25,602

 

 

38,609

 

 

2,279

 

 

(500,506

)

 

 

 

4,538

 

 

75,193

 

 

 

3


 

Sundial Growers Inc.

Condensed Consolidated Interim Statement of Changes in Shareholders’ Equity

(Unaudited - expressed in thousands of Canadian dollars)

 

Note

Share capital

 

Warrants

 

Contributed

surplus

 

Convertible

notes – equity

component

 

Contingent consideration

 

Accumulated deficit

 

Accumulated

other

comprehensive

income

 

Non-

controlling

interest

 

Total equity

 

Balance at December 31, 2018

 

 

65,133

 

 

3,108

 

 

9,493

 

 

3,232

 

 

 

 

(88,874

)

 

 

 

 

 

(7,908

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

(126,476

)

 

 

 

(67

)

 

(126,543

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,869

)

 

 

 

(3,869

)

Share issuances

16(b)

 

197,789

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

197,789

 

Shares issued to related parties

 

 

63,460

 

 

5,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

69,293

 

Share issuance costs

16(b)

 

(12,499

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12,499

)

Business acquisitions

 

 

39,849

 

 

 

 

 

 

 

 

2,279

 

 

 

 

 

 

4,879

 

 

47,007

 

Convertible debt - conversions

 

 

100,994

 

 

3,052

 

 

 

 

(1,348

)

 

 

 

 

 

 

 

 

 

102,698

 

Warrants reclassified from liability

 

 

 

 

16,091

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,091

 

Warrants exercised

16(c)

 

21,791

 

 

(3,831

)

 

 

 

 

 

 

 

 

 

 

 

 

 

17,960

 

Share-based compensation

17

 

2,320

 

 

 

 

32,232

 

 

 

 

 

 

 

 

 

 

 

 

34,552

 

Employee warrants exercised

17

 

17,156

 

 

 

 

(15,911

)

 

 

 

 

 

 

 

 

 

 

 

1,245

 

Balance at September 30, 2019

 

 

495,993

 

 

24,253

 

 

25,814

 

 

1,884

 

 

2,279

 

 

(215,350

)

 

(3,869

)

 

4,812

 

 

335,816

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2019

 

 

111,605

 

 

 

 

19,407

 

 

3,232

 

 

2,279

 

 

(117,898

)

 

 

 

4,851

 

 

23,476

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

(97,452

)

 

 

 

(39

)

 

(97,491

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,869

)

 

 

 

(3,869

)

Share issuances

16(b)

 

190,797

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

190,797

 

Issued to related parties

 

 

63,460

 

 

5,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

69,293

 

Share issuance costs

 

 

(12,498

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12,498

)

Business acquisitions

 

 

37,248

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

37,248

 

Convertible debt - conversions

 

 

100,994

 

 

3,052

 

 

 

 

(1,348

)

 

 

 

 

 

 

 

 

 

102,698

 

Warrants reclassified from liability

 

 

 

 

16,091

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,091

 

Warrants exercised

16(c)

 

2,228

 

 

(723

)

 

 

 

 

 

 

 

 

 

 

 

 

 

1,505

 

Share-based compensation

17

 

1,738

 

 

 

 

6,660