Full Press Release Details
AURORA CANNABIS INC.
Condensed Consolidated Interim Financial
For the three months ended September
(in Canadian Dollars)
| Condensed Consolidated Interim Statements of Financial Position | 3 |
| Condensed Consolidated Interim Statements of Comprehensive Loss | 4 |
| Condensed Consolidated Interim Statements of Changes in Equity | 6 |
| Condensed Consolidated Interim Statements of Cash Flows | 8 |
| Notes to the Condensed Consolidated Interim Financial Statements |
| Note 1 | Nature of Operations | 9 | Note 14 | Convertible Debentures | 22 | |
| Note 2 | Significant Accounting Policies and Judgments | 9 | Note 15 | Loans and Borrowings | 22 | |
| Note 3 | Accounts Receivable | 11 | Note 16 | Share Capital | 24 | |
| Note 4 | Strategic Investments | 12 | Note 17 | Share-Based Compensation | 25 | |
| Note 5 | Marketable Securities and Derivatives | 14 | Note 18 | (Loss) Earnings Per Share | 26 | |
| Note 6 | Investments in Associates and Joint Ventures | 16 | Note 19 | Other (Losses) Gains | 27 | |
| Note 7 | Biological Assets | 16 | Note 20 | Supplementary Cash Flow Information | 27 | |
| Note 8 | Inventory | 17 | Note 21 | Commitments and Contingencies | 28 | |
| Note 9 | Property, Plant and Equipment | 17 | Note 22 | Revenue | 30 | |
| Note 10 | Assets Held for Sale and Discontinued Operations | 18 | Note 23 | Segmented Information | 30 | |
| Note 11 | Business Combinations | 19 | Note 24 | Fair Value of Financial Instruments | 31 | |
| Note 12 | Non-Controlling Interests | 20 | Note 25 | Financial Instruments Risk | 32 | |
| Note 13 | Intangible Assets and Goodwill | 20 | Note 26 | Subsequent Events | 34 |
AURORA CANNABIS INC.
Condensed Consolidated Interim
Statements of Financial Positions
As at September 30, 2020 and June 30, 2020
(Unaudited - Amounts reflected in thousands of Canadian
| Notes | September 30, 2020 | June 30, 2020 | |||
| $ | $ | ||||
| Assets | |||||
| Current | |||||
| Cash and cash equivalents | 133,678 | 162,179 | |||
| Accounts receivable | 3, 25(a) | 74,001 | 54,110 | ||
| Income taxes receivable | 23 | - | |||
| Marketable securities | 5(a) | 17,147 | 7,066 | ||
| Derivatives | 5(b) | 465 | 11,791 | ||
| Biological assets | 7 | 29,049 | 35,435 | ||
| Inventory | 8 | 155,683 | 121,827 | ||
| Prepaids and other current assets | 12,917 | 22,137 | |||
| Assets held for sale | 10 | 7,782 | 6,194 | ||
| 430,745 | 420,739 | ||||
| Property, plant and equipment | 9 | 937,479 | 946,380 | ||
| Derivatives | 5(b) | 44,697 | 41,791 | ||
| Deposits | 12,812 | 12,329 | |||
| Loan receivable | 4,159 | 3,643 | |||
| Investments in associates and joint ventures | 6 | 1,038 | 18,114 | ||
| Intangible assets | 13 | 400,234 | 412,267 | ||
| Goodwill | 13 | 926,108 | 927,882 | ||
| Total assets | 2,757,272 | 2,783,145 | |||
| Liabilities | |||||
| Current | |||||
| Accounts payable and accrued liabilities | 25(b) | 89,316 | 95,574 | ||
| Deferred revenue | 22 | 2,172 | 3,505 | ||
| Convertible debentures | 14 | 32,886 | 32,110 | ||
| Loans and borrowings | 15 | 104,308 | 120,508 | ||
| Contingent consideration payable | 24 | 288 | 19,054 | ||
| Deferred gain on derivatives | - | 20 | |||
| Provisions | 350 | 1,485 | |||
| 229,320 | 272,256 | ||||
| Convertible debentures | 14 | 289,236 | 294,928 | ||
| Loans and borrowings | 15 | 80,615 | 83,701 | ||
| Derivative liability | 14 | 92 | 1,827 | ||
| Other long-term liability | 37 | 37 | |||
| Deferred tax liability | 3,993 | 3,946 | |||
| Total liabilities | 603,293 | 656,695 | |||
| Shareholders' equity | |||||
| Share capital | 16 | 5,938,575 | 5,785,395 | ||
| Obligation to issue shares | 16 | 9,765 | - | ||
| Reserves | 133,901 | 145,395 | |||
| Accumulated other comprehensive loss | (195,964) | (187,197) | |||
| Deficit | (3,732,298) | (3,592,787) | |||
| Total equity attributable to Aurora shareholders | 2,153,979 | 2,150,806 | |||
| Non-controlling interests | 12 | - | (24,356) | ||
| Total equity | 2,153,979 | 2,126,450 | |||
| Total liabilities and equity | 2,757,272 | 2,783,145 |
Nature of Operations (Note 1)
Strategic Investments (Note 4)
Commitments and Contingencies (Note 21)
Subsequent Events (Notes 4(a), 10(a), and 26)
The accompanying notes are an integral part of these Condensed
Consolidated Interim Financial Statements.
AURORA CANNABIS INC.
Condensed Consolidated Interim
Statements of Comprehensive Loss
Three months ended September, 2020 and 2019
(Unaudited - Amounts reflected in thousands of Canadian
dollars, except share and per share amounts)
| Three months ended September 30, | |||
| Restated - Note 2(d) and 10(b) | |||
| Notes | 2020 | 2019 | |
| $ | $ | ||
| Revenue from sale of goods | 22 | 82,067 | 81,782 |
| Revenue from provision of services | 22 | 599 | 1,844 |
| Excise taxes | (14,854) | (9,912) | |
| Net revenue | 67,812 | 73,714 | |
| Cost of sales | 43,294 | 34,143 | |
| Gross profit before fair value adjustments | 24,518 | 39,571 | |
| Changes in fair value of inventory sold | 3,304 | 21,305 | |
| Unrealized gain on changes in fair value of biological assets | 7 | (5,407) | (25,899) |
| Gross profit | 26,621 | 44,165 | |
| Expense | |||
| General and administration | 29,289 | 50,551 | |
| Sales and marketing | 15,035 | 21,855 | |
| Acquisition costs | 1,104 | 964 | |
| Research and development | 2,584 | 6,048 | |
| Depreciation and amortization | 9, 13 | 14,074 | 17,978 |
| Share-based compensation | 17(a)(b) | 6,861 | 24,557 |
| 68,947 | 121,953 | ||
| Loss from operations | (42,326) | (77,788) | |
| Other (expense) income | |||
| Legal settlement and contract termination fees | 21(a) | (43,272) | - |
| Interest and other income | 1,267 | 889 | |
| Finance and other costs | (14,691) | (17,876) | |
| Foreign exchange ("FX") gain (loss) | 7,427 | (2,940) | |
| Other (losses) gains | 19 | (10,703) | 127,656 |
| Restructuring charges | (210) | - | |
| Impairment of property, plant and equipment | 9, 10 | (659) | - |
| Impairment of intangible assets and goodwill | 13 | (3,382) | - |
| (64,223) | 107,729 | ||
| (Loss) income from operations before taxes and discontinued operations | (106,549) | 29,941 | |
| Income tax recovery (expense) | |||
| Current | 107 | 4,579 | |
| Deferred, net | (718) | (23,283) | |
| (611) | (18,704) | ||
| Net (loss) income from continuing operations | (107,160) | 11,237 | |
| Net loss from discontinued operations, net of tax | (2,366) | (3,800) | |
| Net (loss) income | (109,526) | 7,437 |
AURORA CANNABIS INC.
Condensed Consolidated Interim
Statements of Comprehensive Loss
Three months ended September, 2020 and 2019
(Unaudited - Amounts reflected in thousands of Canadian
dollars, except share and per share amounts)
| Three months ended September 30, | |||||
| Restated - Note 2(d) and 10(b) | |||||
| Notes | 2020 | 2019 | |||
| $ | $ | ||||
| Other comprehensive (loss) income ("OCI") that will not be reclassified to net loss | |||||
| Deferred tax recovery | - | 1,906 | |||
| Unrealized loss on marketable securities | 5(a) | (7,356) | (19,074) | ||
| (7,356) | (17,168) | ||||
| Other comprehensive (loss) income that may be reclassified to net loss | |||||
| Share of income (loss) from investment in associates | 6 | 265 | (92) | ||
| Foreign currency translation loss | (1,676) | (1,796) | |||
| (1,411) | (1,888) | ||||
| Total other comprehensive loss | (8,767) | (19,056) | |||
| Comprehensive loss from continuing operations | (116,465) | (7,842) | |||
| Comprehensive loss from discontinued operations | (1,828) | (3,777) | |||
| Comprehensive loss | (118,293) | (11,619) | |||
| Net (loss) income from continuing operations attributable to: | |||||
| Aurora Cannabis Inc. | (105,696) | 13,623 | |||
| Non-controlling interests | (1,464) | (2,386) | |||
| Net loss from discontinued operations attributable to: | |||||
| Aurora Cannabis Inc. | (2,366) | (3,800) | |||
| Non-controlling interests | - | - | |||
| Comprehensive loss attributable to: | |||||
| Aurora Cannabis Inc. | (117,624) | (9,325) | |||
| Non-controlling interests | (669) | (2,294) | |||
| Net (loss) earnings per share - basic and diluted | |||||
| Continuing operations | 18 | ($0.90) | $0.16 | ||
| Discontinued operations | 18 | ($0.02) | ($0.04) | ||
| Total operations | 18 | ($0.92) | $0.12 |
The accompanying notes are an integral part of these Condensed
Consolidated Interim Financial Statements.
AURORA CANNABIS INC.
Condensed Consolidated Interim
Statements of Changes in Equity
Three months ended September, 2020
(Unaudited - Amounts reflected in thousands of Canadian
dollars, except share amounts)
| Share Capital | Reserves | AOCI | ||||||||||||||||||||||||||||||||||
| Note | Common Shares | Amount | Obligation to Issue Shares | 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 | Retained Earnings (Deficit) | Non-Controlling Interests | Total | ||||||||||||||||||||
| # | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Balance, June 30, 2020 | 115,228,811 | 5,785,395 | - | 188,803 | 42,973 | 419 | (86,800) | 145,395 | (194,637) | 18,919 | (27) | (11,452) | (187,197) | (3,592,787) | (24,356) | 2,126,450 | ||||||||||||||||||||
| Shares released for earn out payments | 16(b) | 2,171,355 | 30,429 | 4,723 | - | (16,067) | - | - | (16,067) | - | - | - | - | - | - | - | 19,085 | |||||||||||||||||||
| Shares issued through equity financing | 16(b) | 15,127,658 | 116,570 | 5,042 | - | - | - | - | - | - | - | - | - | - | - | - | 121,612 | |||||||||||||||||||
| Share issuance costs | - | (2,287) | - | - | - | - | - | - | - | - | - | - | - | - | - | (2,287) | ||||||||||||||||||||
| Deferred tax on share issuance costs | - | 549 | - | - | - | - | - | - | - | - | - | - | - | - | - | 549 | ||||||||||||||||||||
| Exercise of stock options | 17(a) | 5,084 | 30 | - | (11) | - | - | - | (11) | - | - | - | - | - | - | - | 19 | |||||||||||||||||||
| Exercise of RSUs and DSUs | 17(b) | 46,535 | 2,260 | - | (2,260) | - | - | - | (2,260) | - | - | - | - | - | - | - | - | |||||||||||||||||||
| Share-based compensation (1) | 17 | - | - | - | 5,580 | 1,264 | - | - | 6,844 | - | - | - | - | - | - | - | 6,844 | |||||||||||||||||||
| Change in ownership interests in subsidiaries | 12 | 830,287 | 5,629 | - | - | - | - | - | - | - | - | - | - | - | (31,449) | 25,820 | - | |||||||||||||||||||
| Comprehensive income (loss) for the period | - | - | - | - | - | - | - | - | (7,356) | - | 265 | (1,676) | (8,767) | (108,062) | (1,464) | (118,293) | ||||||||||||||||||||
| Balance, September 30, 2020 | 133,409,730 | 5,938,575 | 9,765 | 192,112 | 28,170 | 419 | (86,800) | 133,901 | (201,993) | 18,919 | 238 | (13,128) | (195,964) | (3,732,298) | - | 2,153,979 |
As at September 30, 2020, there are
50,282 shares in escrow (June 30, 2020 - 50,282 common shares). These securities were originally deposited in escrow on November 30,
2017 in connection with the acquisition of H2 Biopharma Inc. The escrowed common shares are to be released upon receipt of relevant
licenses to cultivate and sell cannabis. During the three months ended September 30, 2020, the Company released nil escrowed common
shares on achievement of the milestones (three months ended September 30, 2019 - 9,989 common shares).
The accompanying notes are an integral part
of these Condensed Consolidated Interim Financial Statements.
AURORA CANNABIS INC.
Condensed Consolidated Interim
Statements of Change in Equity
Three months ended September, 2019
(Unaudited - Amounts reflected in thousands of Canadian
dollars, except share amounts)
| Share Capital (1) | Reserves | AOCI | |||||||||||||||||||||||||||||||
| 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 | Retained Earnings | Non-Controlling Interests | Total | |||||||||||||||||||
| # | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
| Balance, June 30, 2019 | 84,786,562 | 4,673,118 | 143,947 | 40,495 | 41,685 | (86,800) | 139,327 | (156,249) | 18,295 | 352 | (5,568) | (143,170) | (286,311) | 4,410 | 4,387,374 | ||||||||||||||||||
| Shares issued for earn out payments | 27,411 | 4,075 | - | (2,893) | - | - | (2,893) | - | - | - | - | - | - | - | 1,182 | ||||||||||||||||||
| Shares issued through equity financing | 629,872 | 57,451 | - | - | - | - | - | - | - | - | - | - | - | 57,451 | |||||||||||||||||||
| Share issuance costs | - | (1,558) | - | - | - | - | - | - | - | - | - | - | - | - | (1,558) | ||||||||||||||||||
| Exercise of stock options | 70,831 | 5,636 | (3,225) | - | - | - | (3,225) | - | - | - | - | - | - | - | 2,411 | ||||||||||||||||||
| Exercise of warrants | 977 | 102 | - | (29) | - | - | (29) | - | - | - | - | - | - | - | 73 | ||||||||||||||||||
| Exercise of RSUs | 5,555 | 493 | (493) | - | - | - | (493) | - | - | - | - | - | - | - | - | ||||||||||||||||||
| Share-based compensation | - | - | 19,858 | 5,632 | - | - | 25,490 | - | - | - | - | - | - | - | 25,490 | ||||||||||||||||||
| Change in ownership interests in subsidiaries | 217,554 | 20,363 | - | - | - | - | - | - | - | - | - | - | (18,263) | (2,100) | - | ||||||||||||||||||
| Comprehensive income (loss) for the period | - | - | - | - | - | - | - | (19,074) | 1,906 | (92) | (1,796) | (19,056) | 9,823 | (2,386) | (11,619) | ||||||||||||||||||
| Balance, September 30, 2019 | 85,738,762 | 4,759,680 | 160,087 | 43,205 | 41,685 | (86,800) | 158,177 | (175,323) | 20,201 | 260 | (7,364) | (162,226) | (294,751) | (76) | 4,460,804 |
The accompanying notes are an integral part of these Condensed
Consolidated Interim Financial Statements.
AURORA CANNABIS INC.
Condensed Consolidated Interim
Statements of Cash Flows
Three months ended September, 2020 and 2019
(Unaudited - Amounts reflected in thousands of Canadian
| Three months ended September 30, | |||||
| Restated - Note 2(d) and 10(b) | |||||
| Notes | 2020 | 2019 | |||
| $ | $ | ||||
| Operating activities | |||||
| Net (loss) income from continuing operations | (107,160) | 11,237 | |||
| Adjustments for non-cash items: | |||||
| Unrealized gain on changes in fair value of biological assets | 7 | (5,407) | (25,899) | ||
| Changes in fair value included in inventory sold | 3,304 | 21,305 | |||
| Depreciation of property, plant and equipment | 9 | 17,818 | 18,673 | ||
| Amortization of intangible assets | 13 | 8,489 | 10,820 | ||
| Share-based compensation | 6,861 | 24,557 | |||
| Impairment of property, plant and equipment | 9 | 659 | - | ||
| Impairment of intangible assets and goodwill | 13 | 3,382 | - | ||
| Accrued interest and accretion expense | 14, 15 | (596) | (1,039) | ||
| Interest and other income | (579) | - | |||
| Deferred tax expense | 611 | 18,704 | |||
| Other (losses) gains | 19 | 10,703 | (127,656) | ||
| Foreign exchange (gain) loss | (7,427) | 2,940 | |||
| Changes in non-cash working capital | 20 | (35,951) | (45,729) | ||
| Net cash used in operating activities from discontinued operations | (3,238) | (2,821) | |||
| Net cash used in operating activities | (108,531) | (94,908) | |||
| Investing activities | |||||
| Proceeds from disposal of marketable securities | 5 | - | 84,770 | ||
| Loan receivable | (516) | - | |||
| Purchase of property, plant and equipment and intangible assets | 9 | (15,769) | (106,788) | ||
| Disposal of property, plant and equipment | 789 | - | |||
| Payment of contingent consideration | - | (1,607) | |||
| Deposits | 998 | (6,941) | |||
| Net cash provided by investing activities from discontinued operations | 1,698 | 1,103 | |||
| Net cash used in investing activities | (12,800) | (29,463) | |||
| Financing activities | |||||
| Proceeds from long-term loans | - | 50,000 | |||
| Repayment of long-term loans | (16,292) | (1,875) | |||
| Payments of principal portion of lease liabilities | 15(b) | (1,405) | (2,885) | ||
| Restricted cash | - | 1,066 | |||
| Financing fees | (515) | (763) | |||
| Shares issued for cash, net of share issue costs | 114,283 | 58,377 | |||
| Net cash used in financing activities from discontinued operations | - | (82) | |||
| Net cash provided by financing activities | 96,071 | 103,838 | |||
| Effect of foreign exchange on cash and cash equivalents | (3,241) | 332 | |||
| Decrease in cash and cash equivalents | (28,501) | (20,201) | |||
| Cash and cash equivalents, beginning of period | 162,179 | 172,727 | |||
| Cash and cash equivalents, end of period | 133,678 | 152,526 |
Supplemental cash flow information (Note 20)
The accompanying notes are an integral part of these Condensed
Consolidated Interim Financial Statements.
AURORA CANNABIS INC.
Notes to the Condensed Consolidated Interim
Financial Statements
Three months ended September, 2020 and 2019
(Unaudited - Amounts reflected in thousands of Canadian
dollars, except share and per share amounts)
Aurora Cannabis Inc. (the "Company"
or "Aurora") was incorporated under the Business Corporations Act (British Columbia) on December 21,
2006 as Milk Capital Corp. Effective October 2, 2014, the Company changed its name to Aurora Cannabis Inc. The Company's
shares are listed on the New York Stock Exchange ("NYSE") and the Toronto Stock Exchange ("TSX") under
the trading symbol "ACB", and on the Frankfurt Stock Exchange ("FSE") under the trading symbol "21P".
The Company's head office and principal
address is 4818 31 Street East, Edmonton International Airport, Alberta, Canada, T9E 0V6. The Company's registered and records
office address is Suite 1500 - 1055 West Georgia Street, Vancouver, BC V6E 4N7.
The Company's principal strategic
business lines are focused on the production, distribution and sale of cannabis related products in Canada and internationally.
Aurora currently conducts the following key business activities in the jurisdictions listed below:
The United States ("U.S.") represents
the largest cannabis and hemp-derived cannabidiol ("CBD") market globally and as such, Aurora continues to evaluate
its alternatives to establishing an operating footprint in the U.S. During the year ended June 30, 2020, the Company acquired Reliva,
LLC (Note 11) as an entry into this market. As part of the U.S. market strategy, we are considering how various state and federal
regulations will affect the Company's business prospects. The Company is committed to only engage in activities which are
permissible under both state and federal laws.
During the year ended June 30, 2020, the
Company announced a business transformation plan intended to better align the business financially with the current realities of
the cannabis market in Canada while maintaining a sustainable platform for long-term growth. These actions include the rationalization
of selling, general and administrative expenses through a reduction in corporate and production staff. The Company has also initiated
a plan to wind down and close operations at five Canadian facilities including Aurora Prairie, Aurora Mountain, Aurora Ridge, Aurora
Vie, and Aurora Eau.
Accounting Policies and Judgments
of Presentation and Measurement
The condensed consolidated interim financial
statements of the Company have been prepared in accordance with International Financial Reporting Standards ("IFRS")
and International Accounting Standards 34, "Interim Financial Reporting" ("IAS34") as issued by