iAnthus Capital Holdings, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Revision of Prior Period Financial Statements

Revision of Prior Period Financial Statements

9 Months Ended

Sep. 30, 2021

Revision of Prior Period Financial Statements

Note 14 - Revision of Prior Period Financial Statements

During the three months ended March 31, 2021, the Company determined that it had not appropriately recorded cost of inventory as of December 31, 2020. This resulted in an overstatement of the inventory balance, accrued and other current liabilities and accumulated deficit as of December 31, 2020, and income tax expense and an understatement of costs and expenses applicable to revenues for the year ended December 31, 2020.

Based on an analysis of Accounting Standards Codification (“ASC”) 250 – “Accounting Changes and Error Corrections,” Staff Accounting Bulletin 99 – “Materiality” and Staff Accounting Bulletin 108 – “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company determined that these errors were immaterial to the previously issued financial statements, and as such no restatement was necessary. Correcting prior period financial statements for immaterial errors would not require previously filed reports to be amended.

The effect of the adjustments on the line items on the Company’s consolidated balance sheet as of December 31, 2020 was as follows:


	December 31, 2020
	As previously reported			Adjustment			As adjusted
Inventories	$	30,292		$	(4,841	)	$	25,451
Current assets		50,464			(4,841	)		45,623
Total assets		357,974			(4,841	)		353,133
Accrued and other current liabilities		56,381			(1,328	)		55,053
Current liabilities		233,207			(1,328	)		231,879
Total liabilities		307,132			(1,328	)		305,804
Accumulated deficit		(720,629	)		(3,513	)		(724,142	)
Total shareholders’ equity		50,842			(3,513	)		47,329
Total liabilities and shareholders’ equity		357,974			(4,841	)		353,133

As disclosed in the table below, certain amounts within this quarterly report for nine months ended September 30, 2020 have been revised to reflect adjustments for inventory that was not appropriately recorded during such period, as discussed above.


	For the Nine Months Ended September 30, 2020
	As previously reported			Adjustment			As adjusted
Costs and expenses applicable to revenues	$	(40,789	)	$	(5,454	)	$	(46,243	)
Gross margin		64,899			(5,454	)		59,445
Loss from operations		(234,192	)		(5,454	)		(239,646	)
Loss from operations before income tax 1		(269,051	)		(5,314	)		(274,365	)
Income tax expense		13,680			(1,408	)		12,272
Net loss		(282,591	)		(4,046	)		(286,637	)

(1)	The revised balance includes income of $0.1 million, resulting from a reclassification from the income on equity-accounted investment line to the other income line, on the unaudited interim condensed consolidated statements of operations for the nine months ended September 30, 2020.