The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our unaudited financial statements
and related notes included in this Quarterly Report on Form 10-Q and the audited
financial statements and notes thereto as of and for the year ended
Forward-Looking Statements
The information in this discussion contains forward-looking statements and
information within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
("the Exchange Act"), which are subject to the "safe harbor" created by those
sections. The words "anticipates," "believes," "estimates," "expects,"
"intends," "may," "plans," "projects," "will," "should," "could," "predicts,"
"potential," "continue," "would" and similar expressions are intended to
identify forward-looking statements, although not all forward-looking statements
contain these identifying words. We may not actually achieve the plans,
intentions or expectations disclosed in our forward-looking statements and you
should not place undue reliance on our forward-looking statements. Actual
results or events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements that we make. The
forward-looking statements are applicable only as of the date on which they are
made, and we do not assume any obligation to update any forward-looking
statements. All forward-looking statements in this Form 10-Q are made based on
our current expectations, forecasts, estimates and assumptions, and involve
risks, uncertainties and other factors that could cause results or events to
differ materially from those expressed in the forward-looking statements. In
evaluating these statements, you should specifically consider various factors,
uncertainties and risks that could affect our future results or operations.
These factors, uncertainties and risks may cause our actual results to differ
materially from any forward-looking statement set forth in this Form 10-
OVERVIEW
The first phase of the million square foot project, Building 1, a 30,000 square
foot cultivation and processing facility, is fully-operational and is currently
100% leased by a vertically-integrated
The increase in Operating Revenue for the quarter ending
A summary of operational highlights included the following:
?
increased approximately 13% from the quarter ended
? In addition to increased cultivation productivity in the state-of-the-art
greenhouse, the manufacturing of cannabis-infused products has increased
dramatically in Building 1.
? Manufactured infused products produced at Building 1 have achieved success as
some of the bestselling cannabis brands in
categories.
? For the first 10 months of 2022, the revenue from the
market was
2021. The annualized revenue estimate based on the first 10 months of 2022 is
approximately
billion annually.
? The
inception of the Commonwealth's regulated cannabis program.
14
--------------------------------------------------------------------------------
COVID-19 Pandemic
The Company believes that the COVID- 19 pandemic has had certain impacts on its business, but management does not believe there has been a material long-term impact from the effects of the pandemic on the Company's business and operations, results of operations, financial condition, cash flows, liquidity or capital and financial resources.
The Company has established policies to monitor the pandemic and has taken a number of actions to protect its employees, including restricting travel, encouraging quarantine and isolation when warranted, and directing most of its employees to work from home.
SIGNIFICANT ACCOUNTING POLICIES
Leases
Effective
15
--------------------------------------------------------------------------------
Right-of-Use (ROU) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Variable lease payments are not included in the calculation of the right-of-use asset and lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Under the available practical expedient, we account for the lease and non-lease components as a single lease component for all classes of underlying assets as both a lessee and lessor. Further, we elected a short-term lease exception policy on all classes of underlying assets, permitting us to not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less).
RESULTS OF OPERATIONS Total Revenues
During the three months ended
Advertising and Marketing Expenses
Advertising and marketing expenses were
Professional Fees
Professional fees were
General and Administrative Expenses
General and administrative expenses were
Interest Income
Interest income was
Interest Expense
Interest expense was
Net Operating Income/Loss
We had a net income of
16
--------------------------------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
The accompanying unaudited consolidated financial statements have been prepared
assuming the Company will continue as a going concern, which contemplates, among
other things, the realization of assets and satisfaction of liabilities in the
normal course of business. The Company had an accumulated deficit of
The Company is continuing to support the optimization of operations and generate additional revenues from its Massachusetts Cannabis Center (MCC). The Company's cash position and quarterly revenue is currently significant enough to support the Company's daily operations. The Company is not obligated to raise additional funds for the expansion of the MCC. When Management determines expansion opportunities exist the Company may finance construction with cash from operations, a sale-lease-back, refinancing and expand existing debt, issuance of new debt, or sales of equity.
Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate additional revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate additional revenues. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Notes Payable
See Notes 4 of the unaudited consolidated financial statements filed with this report for information concerning our notes payable.
Analysis of Cash Flows
During the three months ended
Cash flows (used by) investing activities were
Cash flows (used by) financing activities were
17
--------------------------------------------------------------------------------
We do not have any firm commitments from any person to provide us with any additional capital.
OFF-BALANCE SHEET ARRANGEMENTS
As of
© Edgar Online, source