2020 Form 10-K Financial Statement

#000156459021017873 Filed on April 07, 2021

View on sec.gov

Income Statement

Concept 2020 2019 Q4 2019
Revenue $57.64M $19.03M $19.03M
YoY Change 202.83% 419.6% 405.36%
Cost Of Revenue $21.12M $10.85M $10.85M
YoY Change 94.67% 298.4% 350.44%
Gross Profit $36.51M $8.181M $8.181M
YoY Change 346.29% 771.12% 502.87%
Gross Profit Margin 63.35% 42.99% 42.99%
Selling, General & Admin $43.67M $39.94M $34.02M
YoY Change 28.35% 220.33% 158.96%
% of Gross Profit 119.6% 488.14% 415.87%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $8.563M $2.397M $4.171M
YoY Change 105.3% 546.06% 665.32%
% of Gross Profit 23.45% 29.3% 50.98%
Operating Expenses $69.12M $43.10M $188.0M
YoY Change -63.24% 243.01% 1290.38%
Operating Profit -$32.61M -$34.92M -$179.8M
YoY Change -81.87% 200.35% 1378.22%
Interest Expense $15.78M -$406.0K $5.559M
YoY Change 183.85% -38.72% -460.04%
% of Operating Profit
Other Income/Expense, Net $763.0K $2.500M $2.500M
YoY Change -69.48% -4557.12% -6678.95%
Pretax Income -$44.94M -$178.0M -$178.0M
YoY Change -74.75% 2062.0% 1689.57%
Income Tax $15.05M $966.0K $966.0K
% Of Pretax Income
Net Earnings -$47.05M -$182.0M -$182.0M
YoY Change -74.15% 2337.14% 1980.59%
Net Earnings / Revenue -81.64% -956.34% -956.34%
Basic Earnings Per Share
Diluted Earnings Per Share -$90.38K -$433.0K -$433.0K
COMMON SHARES
Basic Shares Outstanding
Diluted Shares Outstanding

Balance Sheet

Concept 2020 2019 Q4 2019
SHORT-TERM ASSETS
Cash & Short-Term Investments $18.93M $5.789M $5.789M
YoY Change 227.03% 303.41%
Cash & Equivalents $8.141M
Short-Term Investments
Other Short-Term Assets $2.275M $2.198M $2.198M
YoY Change 3.5% 708.09%
Inventory $18.04M $9.825M $9.825M
Prepaid Expenses $2.198M
Receivables $437.0K $597.0K $597.0K
Other Receivables $5.055M $405.0K $11.83M
Total Short-Term Assets $44.74M $30.24M $30.24M
YoY Change 47.93% 188.56%
LONG-TERM ASSETS
Property, Plant & Equipment $96.08M $41.82M $62.58M
YoY Change 53.54% 215.28%
Goodwill $40.28M
YoY Change 564.19%
Intangibles $35.15M
YoY Change
Long-Term Investments $0.00 $759.0K $759.0K
YoY Change -100.0%
Other Assets $4.305M $8.699M $8.699M
YoY Change -50.51% 1002.53%
Total Long-Term Assets $160.0M $172.5M $172.5M
YoY Change -7.21% 245.0%
TOTAL ASSETS
Total Short-Term Assets $44.74M $30.24M $30.24M
Total Long-Term Assets $160.0M $172.5M $172.5M
Total Assets $204.8M $202.7M $202.7M
YoY Change 1.01% 235.21%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $4.722M $5.866M $5.866M
YoY Change -19.5% 187.13%
Accrued Expenses $8.336M $4.437M $4.437M
YoY Change 87.87%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $5.024M $6.190M $6.190M
YoY Change -18.84% -33.01%
Total Short-Term Liabilities $37.78M $18.85M $18.85M
YoY Change 100.42% 55.02%
LONG-TERM LIABILITIES
Long-Term Debt $61.99M $81.80M $81.80M
YoY Change -24.22% 181675.56%
Other Long-Term Liabilities $56.25M $27.29M $27.29M
YoY Change 106.11%
Total Long-Term Liabilities $118.2M $81.80M $109.1M
YoY Change 8.39% 242320.0%
TOTAL LIABILITIES
Total Short-Term Liabilities $37.78M $18.85M $18.85M
Total Long-Term Liabilities $118.2M $81.80M $109.1M
Total Liabilities $162.6M $127.9M $127.9M
YoY Change 27.11% 1087.78%
SHAREHOLDERS EQUITY
Retained Earnings -$203.5M
YoY Change
Common Stock
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $42.15M $74.78M $74.78M
YoY Change
Total Liabilities & Shareholders Equity $204.8M $202.7M $202.7M
YoY Change 1.01% 235.21%

Cashflow Statement

Concept 2020 2019 Q4 2019
OPERATING ACTIVITIES
Net Income -$47.05M -$182.0M -$182.0M
YoY Change -74.15% 2337.14% 1980.59%
Depreciation, Depletion And Amortization $8.563M $2.397M $4.171M
YoY Change 105.3% 546.06% 665.32%
Cash From Operating Activities -$14.04M -$11.90M -$27.39M
YoY Change -48.74% 155.71% 107.04%
INVESTING ACTIVITIES
Capital Expenditures $13.88M -$6.642M $20.91M
YoY Change -33.63% 1490.96% -311.53%
Acquisitions
YoY Change
Other Investing Activities $53.21M -$1.419M $1.407M
YoY Change 3681.95% -93.64% -106.67%
Cash From Investing Activities $39.34M -$8.061M -$19.50M
YoY Change -301.74% -64.55% -37.08%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -14.51M 21.93M 53.60M
YoY Change -127.06% -16.63% 27.63%
NET CHANGE
Cash From Operating Activities -14.04M -11.90M -27.39M
Cash From Investing Activities 39.34M -8.061M -19.50M
Cash From Financing Activities -14.51M 21.93M 53.60M
Net Change In Cash 10.79M 1.975M 6.706M
YoY Change 60.92% -282.31% -401.53%
FREE CASH FLOW
Cash From Operating Activities -$14.04M -$11.90M -$27.39M
Capital Expenditures $13.88M -$6.642M $20.91M
Free Cash Flow -$27.92M -$5.253M -$48.30M
YoY Change -42.2% 24.05% 1342.65%

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<p style="margin-bottom:0pt;margin-top:0pt;text-indent:0%;font-weight:bold;font-family:Times New Roman;font-size:10pt;font-style:normal;text-transform:none;font-variant: normal;"><a name="N1_NATURE_OPERATIONS"></a>1.<font style="margin-left:36pt;"></font><a name="N1_NATURE_OPERATIONS"></a>NATURE OF OPERATIONS</p> <p style="text-align:justify;margin-top:6pt;margin-bottom:0pt;margin-left:4.76%;text-indent:0%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">4Front Ventures Corp. (&#8220;4Front&#8221; or the &#8220;Company&#8221;) exists pursuant to the provisions of the British Columbia Corporations Act.&nbsp;&nbsp;On July 31, 2019, 4Front Holdings LLC (&#8220;Holdings&#8221;) completed a Reverse Takeover Transaction (&#8220;RTO&#8221;) with Cannex Capital Holdings Inc. (&#8220;Cannex&#8221;) whereby Holdings acquired Cannex and the shareholders of Holdings became the controlling shareholders of the Company (Note 11). Following the RTO, the Company&#8217;s SVS are listed on the Canadian Securities Exchange (&#8220;CSE&#8221;) under the ticker &#8220;FFNT&#8221; and are quoted on the OTC (OTCQX:&nbsp;&nbsp;FFNTF).</p> <p style="text-align:justify;margin-bottom:0pt;margin-top:12pt;margin-left:4.76%;text-indent:0%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">As of December 31, 2020, the Company operates five dispensaries in Massachusetts, Illinois, and Michigan. The Company operates two production facilities in Massachusetts and one in Illinois.&nbsp;&nbsp;The Company produces the majority of products that are sold at its Massachusetts and Illinois dispensaries.</p> <p style="text-align:justify;margin-bottom:0pt;margin-top:12pt;margin-left:4.76%;text-indent:0%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">The Company leases real estate and sells equipment, supplies and intellectual property to cannabis producers in the state of Washington. The Company also owns and operates Pure Ratios (which was acquired by Cannex in June 2019), a CBD-focused wellness company in California, that sells non-THC products throughout the United States.</p> <p style="text-align:justify;margin-bottom:0pt;margin-top:12pt;margin-left:4.76%;text-indent:0%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">While marijuana is legal under the laws of several U.S. states (with varying restrictions), the United States Federal Controlled Substances Act classifies all &#8220;marijuana&#8221; as a Schedule I drug, whether for medical or recreational use. Under U.S. federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the United States, and a lack of safety for the use of the drug under medical supervision. </p> <p style="text-align:justify;margin-bottom:0pt;margin-top:12pt;margin-left:4.76%;margin-right:0.99%;text-indent:0%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">The head office address of the Company is 5060 North 40<sup style="font-size:85%;line-height:120%;vertical-align:top">th</sup> Street, Suite 120, Phoenix, Arizona, and the registered office is 550 Burrard Street, Suite 2900, Vancouver, British Columbia.</p>
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<div align="left"> <table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse; width:100%;"> <tr> <td valign="top" style="width:4.76%;white-space:nowrap"> <p style="text-align:justify;margin-top:8pt;margin-bottom:0pt;font-weight:bold;font-style:normal;text-transform:none;font-variant: normal;font-family:Times New Roman;font-size:10pt;">&nbsp;</p></td> <td valign="top" style="width:4.76%;white-space:nowrap"> <p style="text-align:justify;margin-top:8pt;margin-bottom:0pt;font-weight:bold;font-family:Times New Roman;font-size:10pt;font-style:normal;text-transform:none;font-variant: normal;"><font style="font-weight:bold;font-family:Times New Roman;font-size:10pt;font-style:normal;text-transform:none;font-variant: normal;">(</font><font style="font-weight:bold;font-family:Times New Roman;font-size:10pt;font-style:normal;text-transform:none;font-variant: normal;">t</font><font style="font-weight:bold;font-family:Times New Roman;font-size:10pt;font-style:normal;text-transform:none;font-variant: normal;">)</font></p></td> <td valign="top"> <p style="text-align:justify;margin-top:8pt;margin-bottom:0pt;font-weight:bold;font-style:normal;text-transform:none;font-variant: normal;font-family:Times New Roman;font-size:10pt;">Use of Estimates</p></td></tr></table></div> <p style="text-align:justify;Background-color:#FFFFFF;margin-bottom:0pt;margin-top:0pt;margin-left:4.76%;text-indent:0%;font-size:6pt;">&nbsp;</p> <p style="text-align:justify;Background-color:#FFFFFF;margin-bottom:0pt;margin-top:0pt;margin-left:4.76%;text-indent:0%;color:#000000;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">The preparation of the consolidated financial statements and accompanying notes in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results can differ from these estimates.</p>
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