2022 Q4 Form 10-Q Financial Statement

#000149315222031420 Filed on November 10, 2022

View on sec.gov

Income Statement

Concept 2022 Q4 2022 Q3 2021 Q3
Revenue $0.00 $0.00 $0.00
YoY Change
Cost Of Revenue
YoY Change
Gross Profit
YoY Change
Gross Profit Margin
Selling, General & Admin $3.135M $452.2K $2.148M
YoY Change 13.26% -78.95% 211.25%
% of Gross Profit
Research & Development $77.92K $110.9K $116.9K
YoY Change -73.7% -5.09%
% of Gross Profit
Depreciation & Amortization $6.700K $6.714K $2.290K
YoY Change 59.9% 193.19% -77.1%
% of Gross Profit
Operating Expenses $3.266M $563.1K $2.381M
YoY Change 5.54% -76.35% 142.94%
Operating Profit -$3.409M -$2.381M
YoY Change 43.2%
Interest Expense -$1.561M -$1.584M $113.1K
YoY Change 22725.44% -1500.46% 1031.2%
% of Operating Profit
Other Income/Expense, Net $2.074M $1.597M $443.8K
YoY Change 456.01% 259.78%
Pretax Income -$2.753M -$3.397M -$1.824M
YoY Change 0.91% 86.26% 88.0%
Income Tax
% Of Pretax Income
Net Earnings -$2.753M -$3.397M -$1.824M
YoY Change 0.91% 86.26% 88.0%
Net Earnings / Revenue
Basic Earnings Per Share -$0.17 -$0.14
Diluted Earnings Per Share -$0.14 -$166.2K -$126.8K
COMMON SHARES
Basic Shares Outstanding 15.71M shares 15.56M shares 14.38M shares
Diluted Shares Outstanding 408.7K shares

Balance Sheet

Concept 2022 Q4 2022 Q3 2021 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $2.269M $7.869M $9.835M
YoY Change -70.81% -19.99% 2085.45%
Cash & Equivalents $2.269M $7.869M $9.835M
Short-Term Investments
Other Short-Term Assets $598.3K $385.0K $479.9K
YoY Change 93.61% -19.78% 219.92%
Inventory
Prepaid Expenses $436.5K $334.7K
Receivables $48.94K $46.74K $31.55K
Other Receivables $48.94K $46.74K $0.00
Total Short-Term Assets $2.917M $8.301M $10.35M
YoY Change -64.07% -19.77% 1568.7%
LONG-TERM ASSETS
Property, Plant & Equipment $121.7K $116.4K $2.108M
YoY Change 196.97% -94.48% 4.88%
Goodwill
YoY Change
Intangibles $13.09M $9.861M
YoY Change 786.07%
Long-Term Investments
YoY Change
Other Assets $2.086M $2.086M $0.00
YoY Change 4021.64% -100.0%
Total Long-Term Assets $18.93M $15.60M $3.578M
YoY Change 418.82% 336.04% 67.98%
TOTAL ASSETS
Total Short-Term Assets $2.917M $8.301M $10.35M
Total Long-Term Assets $18.93M $15.60M $3.578M
Total Assets $21.85M $23.90M $13.92M
YoY Change 85.69% 71.67% 406.33%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $498.2K $445.2K $197.2K
YoY Change 125.77% -79.24%
Accrued Expenses $365.5K $595.1K $813.9K
YoY Change -26.88% 42.78%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $3.942M $4.082M
YoY Change
Total Short-Term Liabilities $5.361M $6.073M $1.830M
YoY Change 134.5% 231.79% 18.86%
LONG-TERM LIABILITIES
Long-Term Debt $44.30K $43.77K $47.09K
YoY Change -6.4% -7.05% 56.97%
Other Long-Term Liabilities $5.899M $7.868M $1.843M
YoY Change 311.98% 326.96%
Total Long-Term Liabilities $5.943M $7.912M $1.890M
YoY Change 301.79% 318.64% 6199.97%
TOTAL LIABILITIES
Total Short-Term Liabilities $5.361M $6.073M $1.830M
Total Long-Term Liabilities $5.943M $7.912M $1.890M
Total Liabilities $11.30M $13.99M $3.720M
YoY Change 200.22% 275.91% 136.97%
SHAREHOLDERS EQUITY
Retained Earnings -$32.80M -$30.02M
YoY Change 64.82%
Common Stock $27.14M $27.00M
YoY Change 5.87%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $10.54M $9.917M $10.20M
YoY Change
Total Liabilities & Shareholders Equity $21.85M $23.90M $13.92M
YoY Change 85.69% 71.67% 406.33%

Cashflow Statement

Concept 2022 Q4 2022 Q3 2021 Q3
OPERATING ACTIVITIES
Net Income -$2.753M -$3.397M -$1.824M
YoY Change 0.91% 86.26% 88.0%
Depreciation, Depletion And Amortization $6.700K $6.714K $2.290K
YoY Change 59.9% 193.19% -77.1%
Cash From Operating Activities -$3.191M -$3.830M -$2.218M
YoY Change 50.56% 72.71% 404.04%
INVESTING ACTIVITIES
Capital Expenditures -$38.27K -$780.00 -$240.7K
YoY Change 400.26% -99.68%
Acquisitions
YoY Change
Other Investing Activities -$55.03K $20.00K -$744.2K
YoY Change 358.58% -102.69%
Cash From Investing Activities -$16.75K $19.22K -$984.9K
YoY Change -14.76% -101.95%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -2.260M 9.855M 13.02M
YoY Change -24876.54% -24.33%
NET CHANGE
Cash From Operating Activities -3.191M -3.830M -2.218M
Cash From Investing Activities -16.75K 19.22K -984.9K
Cash From Financing Activities -2.260M 9.855M 13.02M
Net Change In Cash -5.467M 6.044M 9.820M
YoY Change 156.68% -38.46% -2331.89%
FREE CASH FLOW
Cash From Operating Activities -$3.191M -$3.830M -$2.218M
Capital Expenditures -$38.27K -$780.00 -$240.7K
Free Cash Flow -$3.153M -$3.830M -$1.977M
YoY Change 49.29% 93.7% 349.34%

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<p id="xdx_80B_eus-gaap--NatureOfOperations_zfm96GDyWKs8" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>1. <span id="xdx_829_zVfYBRFPuOdb">NATURE OF OPERATIONS AND BASIS OF PREPARATION</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Business Overview</i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">AgriFORCE Growing Systems Ltd. (the “Company”) was incorporated as a private company by Articles of Incorporation issued pursuant to the provisions of the Business Corporations Act (British Columbia) on December 22, 2017. The Company’s registered and records office address is at 300 – 2233 Columbia Street, Vancouver, British Columbia, Canada, V5Y 0M6. On February 13, 2018, the Company changed its name from 1146470 B.C. Ltd to Canivate Growing Systems Ltd. On November 22, 2019 the Company changed its name from Canivate Growing Systems Ltd. to AgriFORCE Growing Systems Ltd.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At AgriFORCE, our purpose is clear: to positively transform farm, food, and family every day, everywhere. With years of in-depth research and development experience, we are pioneers, ready to deliver integrated, practical, and sustainable solutions that can be applied throughout multiple verticals in AgTech. We drive our business through two operating divisions, AgriFORCE Solutions and AgriFORCE Brands.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our two divisions—AgriFORCE Solutions and AgriFORCE Brands—work in partnership to address some of the existential challenges being faced by the world today—climate change, extreme weather, food security and sovereignty, the environmental impact of industrial and commercial farming—working towards providing better tasting, more nutritious plant-based foods and other products to consumers on a global level.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Basis of Presentation</i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying Unaudited Condensed Consolidated Interim Financial Statements (the “interim financial statements”) and related financial information of AgriFORCE Growing Systems Ltd. should be read in conjunction with the audited financial statements and the related notes thereto for the years ended December 31, 2021 and 2020 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 30, 2022. These unaudited interim financial statements have been prepared in accordance with the rules and regulations of the United States Securities and SEC for interim financial information. Accordingly, they do not include all of the information and footnotes required by the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In the opinion of management, the accompanying interim financial statements contain all adjustments which are necessary to state fairly the Company’s financial position as of September 30, 2022 and December 31, 2021, and the results of its operations during the three and nine months ended September 30, 2022 and 2021 and cash flows for the nine months ended September 30, 2022 and 2021. Such adjustments are of a normal and recurring nature. The results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2022, or for any future period.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Liquidity and Management’s Plan</i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company has incurred substantial operating losses since its inception and expects to continue to incur significant operating losses for the foreseeable future. As reflected in the interim financial statements for the nine months ended September 30, 2022, the Company had a net loss of $<span id="xdx_904_eus-gaap--ProfitLoss_iN_pn5n6_di_c20220101__20220930_zCnLRHF1iO3i" title="Net loss">10.1</span> million, $<span id="xdx_903_eus-gaap--NetCashProvidedByUsedInOperatingActivities_iN_pn5n6_di_c20220101__20220930_zLqp53h67UYc" title="Net cash used in operating activities">8.9</span> million of net cash used in operating activities, and the Company had working capital of $<span id="xdx_90E_ecustom--WorkingCaptial_iI_pn5n6_c20220930_zeHoqoAx56Hj" title="Working captial">2.2</span> million.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying interim financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The interim financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. The Company is at the stage of development of its first facility and other intellectual property. As such it is likely that additional financing will be needed by the Company to fund its operations and to develop and commercialize its technology. These factors raise substantial doubt about the Company’s ability to continue as a going concern. For the next twelve months from issuance of these interim financial statements, the Company will seek to obtain additional capital through the sale of debt or equity financings or other arrangements to fund operations; however, there can be no assurance that the Company will be able to raise needed capital under acceptable terms, if at all. The sale of additional equity may dilute existing shareholders and newly issued shares may contain senior rights and preferences compared to our currently outstanding common shares. If the Company is unable to obtain such additional financing, future operations would need to be scaled back or discontinued. Due to the uncertainty in the Company’s ability to raise capital, management believes that there is substantial doubt in the Company’s ability to continue as a going concern for twelve months from the issuance of these interim financial statements.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p>
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AGRI Initial Lease Rightofuse Asset
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CY2021Q4 AGRI Legal Retainer
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CY2022Q3 AGRI Contingent Consideration Payable
ContingentConsiderationPayable
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AccountsPayableCurrentAndNoncurrent
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CY2021Q4 us-gaap Accounts Payable Current And Noncurrent
AccountsPayableCurrentAndNoncurrent
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CY2021Q4 us-gaap Accrued Liabilities Current And Noncurrent
AccruedLiabilitiesCurrentAndNoncurrent
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CY2022Q3 us-gaap Accounts Payable And Other Accrued Liabilities
AccountsPayableAndOtherAccruedLiabilities
200637 usd
CY2021Q4 us-gaap Accounts Payable And Other Accrued Liabilities
AccountsPayableAndOtherAccruedLiabilities
137168 usd
CY2022Q3 us-gaap Accounts Payable And Accrued Liabilities Current And Noncurrent
AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent
996521 usd
CY2021Q4 us-gaap Accounts Payable And Accrued Liabilities Current And Noncurrent
AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent
1532312 usd
CY2022Q3 us-gaap Accrued Professional Fees Current
AccruedProfessionalFeesCurrent
72955 usd
CY2021Q4 us-gaap Accrued Professional Fees Current
AccruedProfessionalFeesCurrent
66408 usd
CY2022Q3 us-gaap Interest Payable Current
InterestPayableCurrent
22935 usd
CY2021Q4 us-gaap Interest Payable Current
InterestPayableCurrent
24797 usd
CY2022Q3 us-gaap Due To Officers Or Stockholders Current
DueToOfficersOrStockholdersCurrent
30286 usd
CY2021Q4 us-gaap Due To Officers Or Stockholders Current
DueToOfficersOrStockholdersCurrent
39309 usd
us-gaap Payments Related To Tax Withholding For Share Based Compensation
PaymentsRelatedToTaxWithholdingForShareBasedCompensation
75282 usd
CY2021 us-gaap Payments Related To Tax Withholding For Share Based Compensation
PaymentsRelatedToTaxWithholdingForShareBasedCompensation
89236 usd
us-gaap Legal Fees
LegalFees
149240 usd
CY2021 us-gaap Legal Fees
LegalFees
174598 usd
CY2021Q4 us-gaap Other Accrued Liabilities Current
OtherAccruedLiabilitiesCurrent
86679 usd
CY2021Q4 us-gaap Secured Debt
SecuredDebt
500000 usd
us-gaap Debt Instrument Maturity Date
DebtInstrumentMaturityDate
2024-12-31
CY2022Q3 us-gaap Debt Instrument Carrying Amount
DebtInstrumentCarryingAmount
14025000 usd
CY2022Q3 AGRI Repayments And Conversions
RepaymentsAndConversions
-1272000 usd
CY2022Q3 us-gaap Debt Instrument Unamortized Discount
DebtInstrumentUnamortizedDiscount
8670613 usd
CY2022Q3 us-gaap Secured Debt Current
SecuredDebtCurrent
4082387 usd
us-gaap Debt Conversion Converted Instrument Amount1
DebtConversionConvertedInstrumentAmount1
150000 usd
us-gaap Debt Conversion Converted Instrument Shares Issued1
DebtConversionConvertedInstrumentSharesIssued1
67568 shares
us-gaap Gains Losses On Extinguishment Of Debt
GainsLossesOnExtinguishmentOfDebt
93973 usd
CY2022Q3 us-gaap Long Term Loans Payable
LongTermLoansPayable
43773 usd
us-gaap Other Comprehensive Income Foreign Currency Transaction And Translation Adjustment Net Of Tax Portion Attributable To Parent
OtherComprehensiveIncomeForeignCurrencyTransactionAndTranslationAdjustmentNetOfTaxPortionAttributableToParent
3553 usd
us-gaap Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Liability Purchases
FairValueMeasurementWithUnobservableInputsReconciliationRecurringBasisLiabilityPurchases
7417493 usd
us-gaap Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Liability Settlements
FairValueMeasurementWithUnobservableInputsReconciliationRecurringBasisLiabilitySettlements
-63723 usd
us-gaap Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Liability Period Increase Decrease
FairValueMeasurementWithUnobservableInputsReconciliationRecurringBasisLiabilityPeriodIncreaseDecrease
-1042949 usd
AGRI Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Liability Period Effect Of Exchange Rate Changes
FairValueMeasurementWithUnobservableInputsReconciliationRecurringBasisLiabilityPeriodEffectOfExchangeRateChanges
-411821 usd
CY2022Q3 us-gaap Fair Value Measurement With Unobservable Inputs Reconciliations Recurring Basis Liability Value
FairValueMeasurementWithUnobservableInputsReconciliationsRecurringBasisLiabilityValue
5899000 usd
us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
16256844 shares
us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
6588237 shares
CY2022Q1 us-gaap Operating Lease Liability
OperatingLeaseLiability
1776599 usd
CY2022Q1 us-gaap Operating Lease Right Of Use Asset
OperatingLeaseRightOfUseAsset
1837782 usd
us-gaap Operating Lease Cost
OperatingLeaseCost
226098 usd
us-gaap Short Term Lease Cost
ShortTermLeaseCost
12630 usd
us-gaap Lease Cost
LeaseCost
238728 usd
CY2022Q3 us-gaap Lessee Operating Lease Remaining Lease Term
LesseeOperatingLeaseRemainingLeaseTerm
P7Y
CY2022Q3 us-gaap Lessee Operating Lease Discount Rate
LesseeOperatingLeaseDiscountRate
0.070 pure
CY2022Q3 us-gaap Finance Lease Liability
FinanceLeaseLiability
0 usd
CY2022Q3 us-gaap Lessee Operating Lease Liability Payments Remainder Of Fiscal Year
LesseeOperatingLeaseLiabilityPaymentsRemainderOfFiscalYear
66677 usd
CY2022Q3 us-gaap Lessee Operating Lease Liability Payments Due Next Twelve Months
LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths
267886 usd
CY2022Q3 us-gaap Lessee Operating Lease Liability Payments Due Year Two
LesseeOperatingLeaseLiabilityPaymentsDueYearTwo
277074 usd
CY2022Q3 us-gaap Lessee Operating Lease Liability Payments Due Year Three
LesseeOperatingLeaseLiabilityPaymentsDueYearThree
292826 usd
CY2022Q3 us-gaap Lessee Operating Lease Liability Payments Due Year Four
LesseeOperatingLeaseLiabilityPaymentsDueYearFour
292826 usd
CY2022Q3 us-gaap Lessee Operating Lease Liability Payments Due After Year Five
LesseeOperatingLeaseLiabilityPaymentsDueAfterYearFive
805272 usd
CY2022Q3 us-gaap Lessee Operating Lease Liability Payments Due
LesseeOperatingLeaseLiabilityPaymentsDue
2002561 usd
CY2022Q3 us-gaap Lessee Operating Lease Liability Undiscounted Excess Amount
LesseeOperatingLeaseLiabilityUndiscountedExcessAmount
481693 usd
CY2022Q3 us-gaap Operating Lease Liability
OperatingLeaseLiability
1520868 usd
CY2022Q3 us-gaap Operating Lease Liability Current
OperatingLeaseLiabilityCurrent
244358 usd
CY2022Q3 us-gaap Operating Lease Liability Noncurrent
OperatingLeaseLiabilityNoncurrent
1276510 usd
CY2022Q3 us-gaap Long Term Debt Maturities Repayments Of Principal Remainder Of Fiscal Year
LongTermDebtMaturitiesRepaymentsOfPrincipalRemainderOfFiscalYear
1683000 usd
CY2022Q3 us-gaap Long Term Debt Maturities Repayments Of Principal In Next Twelve Months
LongTermDebtMaturitiesRepaymentsOfPrincipalInNextTwelveMonths
6732000 usd
CY2022Q3 us-gaap Long Term Debt Maturities Repayments Of Principal In Year Two
LongTermDebtMaturitiesRepaymentsOfPrincipalInYearTwo
4338000 usd
CY2022Q3 us-gaap Long Term Debt
LongTermDebt
12753000 usd

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