The Real Story Behind Their Financial State. Press ReleaseSo, some people have been focusing on the revenue numbers of approx. $352M Q4 and $1.337B 2022 annual. They're good numbers and I was impressed, but obviously the market (i.e. shorts) couldn't care less as the stock has dropped on news.
BUT, if you read the press release carefully (I'm a professional accountant), you'll see some disturbing news. Each company will sit down with their auditors and agree on materiality limits, which is the threshold limit by which the auditors will investigate to great lenghts if it is found, in their sampling/investigating of accounts, something is wrong at or beyond that limit. For 2022, CURA has said that there was something wrong with their revenues by 0.75%, which doesn't sound like much until you do the math on $1.337B which is approx. $10M and I presume, would have gone beyond the materiality limits.
The auditors would have then been like dogs on a bone trying to find out why, because they have to provide an audit opinion, as to the reliability of the financial statements, to management and shareholders and they have to be filed publicy (SEDAR/CSE/SEC). Every audited public company has to have an unqualified opinion on their FS from their auditors or they're worthless. If you read the press release, they say that the previous FS for 2021 and 2022 " ...should no longer be relied upon. In addition, Curaleaf determined that there were additional material weaknesses in its internal controls at the time of its prior financial statements." This is a damning statement and would have raised serious concerns with their auditors.
Internal control weaknesses are a huge red flag to auditors, CSE, SEC, shareholders and investors. So when BOJO told us that the delay was to conversion to US GAAP on the March 24 press release, that wasn't true. What I suspect was that the auditors had found material inetrnal control weaknesses and could not provide an unqulified opinion until it was investigated and proper new internal controls put in place to prevent in the future (which CURA says they're doing in the press release). As I said at the time of the press release, I couldn't understand why they were delayed just based on the conversion to US GAAP.
I'm sure you will see when the FS are actually released, there will be further explanation of what happened in their MD&A (Management Discussion and Anaysis) which the auditors will also review prior to release. Stay tuned.