Curaleaf Holdings, Inc. CURLF CURA announced that the audit committee of the company's board of directors, with the assistance of outside counsel and consultants and in discussion with the company's auditors, has been conducting, after internal review by management, a review of certain purchases and sales of products through the company's wholesale channel to determine whether they had commercial substance, and to confirm the timing and appropriateness of the recognition of revenue from those transactions, mainly in the last quarter of 2021 and the first and second quarters of 2022.
Further to this review, the company has determined that it will make certain adjustments to the revenue figures reported in its previously issued audited annual consolidated financial statements for the fiscal year ended December 31, 2021 and unaudited interim consolidated financial statements for the first, second and third quarters of the fiscal year ended December 31, 2022, as well as other related flow through adjustments.
The company is finalizing the exact adjustments for these reported prior periods, and currently anticipates that the adjustments will result in a reduction of aggregate revenue for the full 2021 fiscal year of approximately 1.25%, and a reduction of expected aggregate revenue for the full 2022 fiscal year of approximately 0.75%.
As a result, subject to finalizing the adjustments described herein, the company expects its revenue for the fourth quarter of 2022 to be approximately $352 million, and its aggregate revenue for the full 2022 fiscal year to be approximately $1.337 billion.
"We are committed to accurate and transparent financial reporting," stated Ed Kremer, Curaleaf's CFO. "We have begun taking a number of remediation steps and are committed to taking additional steps to enhance our controls so that this situation does not repeat in the future. We remain focused on executing on our strategies and continuing to expand our product innovations to strengthen the overall position of the company."
Curaleaf intends to file its audited annual consolidated financial statements for the fiscal year ended December 31, 2022 and related management's discussion and analysis by May 1st, 2023.
The company currently expects to release its unaudited interim consolidated financial statements for the three months ended March 31, 2023 on or about May 17, 2023.
Photo by Mackenzie Marco on Unsplash
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