Zenabis Files Amended and Restated Interim Financials and MD&A for Q1 2020
Vancouver, British Columbia – June 12, 2020 – Zenabis Global Inc. (TSX:ZENA) (“Zenabis” or the “Company”) announces that following a review by the Company’s auditors, the Company has filed amended and restated interim financial statements and management’s discussion and analysis for the three months ended March 31, 2020 and 2019.
Zenabis noted that while the changes discussed below result in a change in comprehensive loss, for the three months ended March 31, 2020, income from operations remained unchanged at $5,189,328 and adjusted EBITDA also remained unchanged at $2,343,955 (see “Non-GAAP Financial Measures”).
In the course of the Company’s auditor conducting a review of the Company’s interim financial statements for the three months ended March 31, 2020, and 2019, it was determined that the following adjustments should be made:
- The Company updated its accounting analysis with respect to the induced early conversion of unsecured convertible notes which led to a revised conclusion that a loss on early conversion in conjunction with the unsecured convertible notes for $5,624,803 was not recorded. In addition to this, the warrants which were issued on conversion were fair valued at $891,916 and classified as equity instruments within the ‘Reserve for Equity’ in the Statement of Equity. ‘Share Capital’ was also increased by $4,732,887 related to the conversion.
- The deferred income tax liability for True Büch as at the date of disposal was understated by $568,670. This resulted in an increase to the ‘Loss from loss of control of a former subsidiary’ of $568,670.
- Adjustments were also made to correct values assigned to ‘Accounts receivable’, ‘Prepaid and other current assets’, ‘Other assets’, ‘Property, plant and equipment’, ‘Accounts payable and accrued liabilities’, ‘Customer deposits’, ‘Current loans and borrowings’, ‘Long-term loans and borrowings’ and ‘Deferred income tax liability’ on the condensed consolidated interim statement of financial position.
Details of the changes are fully described in Note 21 to the amended and restated unaudited condensed consolidated interim financial statements, as filed on SEDAR on June 12, 2020. Accordingly, the unaudited condensed consolidated interim financial statements and related management’s discussion and analysis for these periods have been amended and restated.
A copy of the amended and restated condensed consolidated interim financial statements and management’s discussion and analysis for the three months ended March 31, 2020 and 2019 have been posted on the Company’s website and have been filed under the Company’s profile on SEDAR at www.sedar.com.
Non-GAAP Financial Measures
Adjusted EBITDA is not a recognized, defined, or standardized measure under IFRS and may not be compared to similar measures presented by other issuers. Adjusted EBITDA is a metric used by management, calculated as net loss before fair value adjustment to biological assets and inventory; restructuring costs; share-based compensation; depreciation and amortization; finance and investment income; interest expense; gain on sale of property, plant and equipment; loss due to an event; loss on deconsolidation of subsidiary; government subsidies; loss on early conversion of debt; other expense; current income tax expense; and deferred income tax expense. Management believes adjusted EBITDA is a useful financial metric to assess the Company’s operating performance before the impact of non-cash items and acquisition related activities.
Zenabis is a significant Canadian licensed cannabis cultivator of medical and recreational cannabis, and a propagator and cultivator of floral and vegetable products. Zenabis employs staff coast-to-coast, across facilities in Atholville, New Brunswick; Delta, Aldergrove, Pitt Meadows and Langley, British Columbia; and Stellarton, Nova Scotia. Zenabis currently has 111,200 kg of licensed cannabis cultivation space across four licensed facilities. Zenabis has 3.5 million square feet of total facility space dedicated to a mix of cannabis production and cultivation and its propagation and floral business.
Zenabis expects Zenabis Stellarton and Zenabis Langley facilities to join Zenabis Atholville in steady state production in 2020. The Zenabis brand name is used in the cannabis medical market, the Namaste, Blazery and Re-Up brand names are used in the adult-use recreational cannabis market.
For more information, visit: https://www.zenabis.com.