Segment Information and Disaggregated Net Revenue | Segment Information and Disaggregated Net Revenue Segment reporting is prepared on the same basis that the Company’s chief operating decision makers (the “CODMs”) manage the business, make operating decisions and assess the Company’s performance. For the years ended December 31, 2021 and December 31, 2020, the Company determined that it has the following two reportable segments: United States and Rest of World. The United States operating segment consists of the manufacture and distribution of U.S. hemp-derived CBD infused products. The Rest of World operating segment is involved in the cultivation, manufacture, and marketing of cannabis and cannabis-derived products for the medical and adult-use markets . These two segments represent the geographic regions in which the Company operates and the different product offerings within each geographic region. The results of each segment are regularly reviewed by the CODMs to assess the performance of the segment and make decisions regarding the allocation of resources. The CODMs review adjusted earnings (loss) before interest, tax, depreciation and amortization (“Adjusted EBITDA”) as the measure of segment profit or loss to evaluate performance of and allocate resources for its reportable segments. Adjusted EBITDA is defined as earnings before interest, tax, depreciation, non-cash items and items that do not reflect management’s assessment of ongoing business performance. The tables below set forth our consolidated results of operations by segment: Year ended December 31, 2021 United States Rest of World Corporate Total Cannabis flower $ — $ 55,194 $ — $ 55,194 Cannabis extracts 9,874 8,807 — 18,681 Other — 560 — 560 Net revenue 9,874 64,561 — 74,435 Share of loss from equity accounted investments — 6,313 — 6,313 Interest income 40 9,058 — 9,098 Interest expense — (27) — (27) Interest income (expense), net 40 9,031 — 9,071 Total assets 462,830 273,484 661,424 1,397,738 Depreciation and amortization 295 4,189 — 4,484 Impairment loss on goodwill and indefinite-lived assets 236,019 37 — 236,056 Impairment loss on long-lived assets 2,955 124,664 — 127,619 Loss from discontinued operations — (500) — (500) Adjusted EBITDA (40,717) (99,139) (20,607) (160,463) Purchase of property, plant and equipment, net 776 10,368 — 11,144 Year ended December 31, 2020 United States Rest of World Corporate Total Cannabis flower $ — $ 27,932 $ — $ 27,932 Cannabis extracts 9,495 8,759 — 18,254 Other — 533 — 533 Net revenue 9,495 37,224 — 46,719 Share of loss from equity accounted investees — 4,510 — 4,510 Interest income 16 18,585 — 18,601 Interest expense (34) (152) — (186) Interest income, net (18) 18,433 — 18,415 Total assets 253,745 388,351 1,283,586 1,925,682 Depreciation and amortization 234 2,638 — 2,872 Impairment loss on goodwill and indefinite-lived assets 40,000 — — 40,000 Loss from discontinued operations — (650) — (650) Adjusted EBITDA (28,019) (98,349) (20,885) (147,253) Purchase of property, plant and equipment, net 385 31,027 — 31,412 Year ended December 31, 2019 United States Rest of World Corporate Total Cannabis flower $ — $ 15,020 $ — $ 15,020 Cannabis extracts 3,364 5,338 — 8,702 Other — 28 — 28 Net revenue 3,364 20,386 — 23,750 Share of loss from equity accounted investees — 2,009 — 2,009 Interest income 6 29,207 — 29,213 Interest expense — (1,244) — (1,244) Interest income, net 6 27,963 — 27,969 Total assets 293,985 309,854 1,486,603 2,090,442 Depreciation and amortization 46 2,044 — 2,090 Loss from discontinued operations — (363) — (363) Adjusted EBITDA (1,703) (84,826) (11,779) (98,308) Purchase of property, plant and equipment, net 259 38,405 — 38,664 The following tables set forth a reconciliation of net income (loss) as determined in accordance with U.S. GAAP to Adjusted EBITDA for the periods indicated: (in thousands of U.S. dollars) Year ended December 31, 2021 US ROW Corporate Total Net income (loss) $ (283,883) $ (81,811) $ (31,510) $ (397,204) Interest income, net (40) (9,031) — (9,071) Income tax benefit (89) (342) — (431) Share of loss from equity accounted investments — 6,313 — 6,313 Impairment loss on goodwill and indefinite-lived intangible assets (i) 236,019 37 — 236,056 Impairment loss on long-lived assets (ii) 2,955 124,664 — 127,619 Gain on revaluation of derivative liabilities (iii) — (151,360) — (151,360) Gain on revaluation of financial instruments (iv) — (8,611) — (8,611) Transaction costs (v) — — 3,801 3,801 Other, net (vii) 3 (733) — (730) Loss from discontinued operations (viii) — 500 — 500 Share-based payments (ix) 3,401 6,750 — 10,151 Financial statement review costs (x) — — 7,102 7,102 Depreciation and amortization 917 14,485 — 15,402 Adjusted EBITDA $ (40,717) $ (99,139) $ (20,607) $ (160,463) (in thousands of U.S. dollars) Year ended December 31, 2020 US ROW Corporate Total Net income (loss) $ (77,368) $ 32,671 $ (30,573) $ (75,270) Interest expense (income), net 18 (18,433) — (18,415) Income tax expense 323 1,024 — 1,347 Share of loss from equity accounted investments — 4,510 — 4,510 Impairment loss on goodwill and indefinite-lived intangible assets (i) 40,000 — — 40,000 Gain on revaluation of derivative liabilities (iii) — (129,254) — (129,254) Loss on revaluation of financial instruments (iv) — 9 — 9 Transaction costs (v) 40 — — 40 Gain on disposal of other investments (vi) — (4,789) — (4,789) Other, net (vii) 20 1,805 — 1,825 Loss from discontinued operations (viii) — 650 — 650 Share-based payments (ix) 8,714 6,647 — 15,361 Financial statement review costs (x) — — 9,688 9,688 Depreciation and amortization 234 6,811 — 7,045 Adjusted EBITDA $ (28,019) $ (98,349) $ (20,885) $ (147,253) (in thousands of U.S. dollars) Year ended December 31, 2019 US ROW Corporate Total Net income (loss) $ (2,888) $ 1,180,241 $ (11,779) $ 1,165,574 Interest income, net (6) (27,963) — (27,969) Repurposing charges — 7,268 — 7,268 Share of loss from equity accounted investments — 2,009 — 2,009 Gain on revaluation of derivative liabilities (iii) — (1,276,819) — (1,276,819) Gain on revaluation of financial instruments (iv) — (197) — (197) Transaction costs (v) 117 32,091 — 32,208 Gain on disposal of investments (vi) — (16,277) — (16,277) Loss from discontinued operations (viii) — 363 — 363 Share-based payments (ix) 900 10,719 — 11,619 Depreciation and amortization 174 3,739 — 3,913 Adjusted EBITDA $ (1,703) $ (84,826) $ (11,779) $ (98,308) (i) For the year ended December 31, 2021, impairment loss on goodwill and indefinite-lived intangible assets relates to impairment on goodwill and intangible assets related to our U.S. segment and impairment on an indefinite-lived trademark related to the ROW segment. For the year ended December 31, 2020, impairment loss on goodwill and indefinite-lived intangible assets relates to impairment on goodwill and intangible assets related to the U.S. segment. See Note 6 “ Goodwill and Intangible Assets, net .” (ii) For the year ended December 31, 2021, impairment loss on long-lived assets relates to impairment charges on property, plant and equipment and definite-lived intangible assets in the Canadian asset group, impairment charges for the differences between the consideration paid to Ginkgo for the achievement of two equity milestones in connection with the Ginkgo Collaboration Agreement and the fair values of the CBGA Exclusive License and CBGVA Exclusive License as well as impairment on leased premises in the U.S. segment. See Note 5 “ Property, Plant and Equipment, net ” and Note 6 “ Goodwill and Intangible Assets, net .” (iii) For the years ended December 31, 2021, 2020 and 2019, the gain on revaluation of derivative liabilities represents the fair value changes on the derivative liabilities. See Note 8 “ Derivative Liabilities .” (iv) For the year ended December 31, 2021, gain on revaluation of financial instruments relates primarily to the Company’s unrealized holding gain on its mark-to-market investment in Cronos Australia as well as revaluations of financial liabilities resulting from DSUs. For the years ended December 31, 2020 and 2019, gain (loss) on revaluation of financial instruments relates to revaluations of financial liabilities resulting from DSUs. See Note 3 “ Investments .” (v) For the years ended December 31, 2021, 2020 and 2019, transaction costs represent legal, financial and other advisory fees and expenses incurred in connection with various strategic investments. These costs are included in general and administrative expenses on the consolidated statements of net income (loss) and comprehensive income (loss). (vi) For the years ended December 31, 2020 and 2019, gain on disposal of investments is primarily comprised of the gain recorded related to the sale of common shares of Aurora, which were received in connection with the achievement of a milestone related to the Whistler Transaction in 2020 and as a result of the closing of the Whistler Transaction in 2019. See Note 3 “ Investments .” (vii) For the years ended December 31, 2021 and 2020, other, net is primarily related to (gain) loss on reclassification of held-for-sale assets and (gain) loss on disposal of assets. (viii) For the years ended December 31, 2021, 2020 and 2019, loss from discontinued operations relates to the discontinuance of OGBC. See Note 16 “ Held-For-Sale Assets and Discontinued Operations .” (ix) For the years ended December 31, 2021, 2020 and 2019, share-based payments relates to the vesting expenses of share-based compensation awarded to employees under the Company’s share-based award plans as described in Note 10. “ Share-based Payments .” (x) For the years ended December 31, 2021 and 2020, financial statement review costs include costs related to the restatements of the Company’s 2019 interim financial statements and second quarter 2021 interim financial statements, costs related to the Company’s responses to requests for information from various regulatory authorities relating to such restatements and legal costs defending shareholder class action complaints brought against the Company as a result of the 2019 restatement. Net revenue attributed to a geographic region based on the location of the customer were as follows: Year ended December 31, 2021 2020 Canada $ 50,294 $ 34,538 Israel 13,376 2,539 United States 9,874 9,495 Other countries 891 147 Net revenue $ 74,435 $ 46,719 Property, plant and equipment, net were physically located in the following geographic regions: As of December 31, 2021 2020 Canada $ 49,117 $ 162,163 United States 480 2,293 Israel 24,473 23,143 Total $ 74,070 $ 187,599 |