NEW YORK and TORONTO, February 16, 2024 – iAnthus Capital Holdings, Inc. (“iAnthus” or the “Company“) (CSE: IAN) (OTCQB: ITHUF), which owns, operates and partners with regulated cannabis operations across the United States, announces that, in connection with the preparation by the Company of its consolidated financial statements for the fiscal year ended December 31, 2023, the Company’s management identified an error related to its financial reporting process in connection with an intercompany consolidation of two wholly-owned subsidiaries and in the valuation of inventory, both resulting in an overstatement of inventory in its previously issued unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2023, as contained in the Company’s Quarterly Report on Form 10-Q for its fiscal quarter ended September 30, 2023 filed with the Securities and Exchange Commission (the “SEC“) on November 9, 2023 and its corresponding management’s discussion and analysis filed publicly on the System or Electronic Document Analysis and Retrieval (SEDAR+). (collectively, the “Third Quarter 2023 Interim Financial Statements“). This error resulted in an overstatement of ‘inventories, net’ and ‘accrued and other current liabilities’ on the unaudited interim condensed consolidated balance sheet as of September 30, 2023, and an overstatement of ‘income tax expense’, and an understatement of ‘cost and expenses applicable to revenues’, on its unaudited interim condensed consolidated statements of operations for the three and nine months ended September 30, 2023. This error has no impact on the cash balance as of September 30, 2023, and results in no net change in cash flows for the nine months ended September 30, 2023.
On February 13, 2024, the Audit Committee of the Company’s Board of Directors concluded, after discussion with the Company’s management and its advisors, that the Third Quarter 2023 Interim Financial Statements were materially misstated due to this error. As a result, the Third Quarter 2023 Interim Financial Statements and accompanying earnings release should no longer be relied upon. The Company anticipates making the appropriate adjustments in an amendment to its Quarterly Report on Form 10-Q filed with the SEC on November 9, 2023, which will include restated unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2023, and any other appropriate revisions no later than February 29, 2024. The Restated Third Quarter 2023 Interim Financial Statements will also be publicly available on the Company’s SEDAR+ profile. The Company will report these errors as material weaknesses and its intended remediation efforts within Item 4. Controls and Procedures in the amended Form 10Q for its fiscal quarter ended September 30, 2023.
The Company’s management and Audit Committee have discussed the matters disclosed in this release with its independent registered public accounting firm, PKF O’Connor Davies, LLP.
iAnthus owns and operates licensed cannabis cultivation, processing and dispensary facilities throughout the United States. For more information, visit www.iAnthus.com.
