Cannabis
1933 Industries Reports Fourth Quarter and Annual Financial Results for Fiscal Year 2019
1933 Industries Inc. (the “Company” or “1933 Industries”) (CSE: TGIF) (OTCQX: TGIFF), a vertically integrated cannabis consumer packaged goods company, is pleased to announce its fourth quarter (“Q4”) and audited annual financial results for the period ended July 31, 2019 (“Year End”). All amounts expressed are in Canadian dollars.
Highlights:
- Strong balance sheet with a cash position of $17.6 million, a robust increase of 245% over the previous year of $5.1 million, allows the Company to fund capital projects, service its debenture payments and continue to grow its operations
- Working capital was $22.5 million, compared to $11.0 million at July 31, 2018, representing an increase of 105%
- 44% year over year increase in revenue, totalling $18.1 million, with a gross margin of $5.3 million
- 100%-owned Infused Manufacturing (“Infused”) contributed $9.9 million in annual revenues, a 130% increase over the previous year, while 91%-owned Alternative Medicine Association (“AMA”) contributed $8.1 million in total revenues
- Steady growth across these subsidiaries netted $5.2 million in Q4 revenue, the largest reported quarterly revenue to date
- Net loss for the year is $19.1 million of which, $5.0 million is attributed to a one-time non-cash impairment write-down of a non-performing subsidiary, $3.4 million in biomass purchases, non-cash share-based compensation of $2.2 million, $1.5 million in interest payments, a one-time non-cash loss on disposal of property and equipment of $1.9 million and a non-cash accretion expense of $1.2 million
- Adjusted EBITDA loss of $10.1 million, compared to $3.1 million in 2018
- Total assets grew by 49% to $61.7 million from $41.3 million at July 31, 2018
- Total liabilities were $24.5 million at July 31, 2019, compared to $4.4 million at July 31, 2018, of which $13.0 million of this increase is attributed to future rent payments of the Company’s new cultivation facility in Las Vegas, Nevada
- IP includes 5 product lines, 100+ product SKUs with major brand traction across 46 U.S. states as well as six licensing partners
Selected Financial Information
All amounts expressed are in Canadian dollars.
Year End 2019 Consolidated Results |
||
July 31, 2019 |
July 31, 2018 |
|
Revenues |
$18,059,774 |
$12,550,683 |
Gross margin |
$5,296,980 |
$6,351,466 |
Cash balance |
$17,613,900 |
$5,056,183 |
Net loss |
($19,111,991) |
($5,729,052) |
Comprehensive loss |
($19,011,564) |
($4,791,300) |
Adjusted EBITDA loss |
($10,113,913) |
($3,078,700) |
Basic and diluted loss per share |
$0.08 |
$0.03 |
Total assets |
$61,654,094 |
$41,339,616 |
Total liabilities |
$24,465,690 |
$4,356,119 |
Total equity |
$37,188,404 |
$36,983,497 |
Results of Operations |
Q4 2019 |
Q4 2018 |
Total revenue |
$5,244,946 |
$3,828,993 |
Gross margin |
$815,690 |
$2,197,803 |
Cash balance |
$17,613,900 |
$5,056,183 |
Net loss |
($5,688,422) |
($3,811,765) |
Adjusted EBITDA loss |
($4,287,416) |
($2,266,992) |
Basic and diluted loss per share |
$0.02 |
$0.02 |
Total assets |
$61,654,094 |
$41,339,616 |
44% Year over Year Revenue Growth Without New Facility
The Company’s $5.5 million growth in revenues over the prior year is attributed to the steady increase in AMA’s number of cannabis plants and total annual plant yield as well as to Infused’s significant product distribution expansion in the United States. Infused’s Canna Hemp™ brand of CBD health and wellness products are sold in over 800 retail outlets across 46 states, and via the Company’s E-Commerce site.
16% Gross Margin Decrease Until New Facility Ramps up Cultivation
The Company saw a decrease in gross margin from $6.4 million to $5.3 million primarily due to increased purchases by AMA of third-party biomass to produce concentrates and final products. The Company anticipates producing sufficient amounts of biomass from its new facility thereby reducing third party purchases, which is expected to significantly improve the realized gross margins. Partially offsetting the increased costs of AMA, Infused has significantly increased its customer base, which has resulted in improved economies of scale in the production of CBD-based products, positively impacting overall gross margin.
$37.7 Million Cash Injection by Financing Activities and Strong Cash Position
- The sale of property and equipment increased cash by $13 million
- The issuance of convertible debenture units increased cash by $15.5 million
- Common shares issued pursuant to a private placement increased cash by $4.5 million
- Common shares issued pursuant to exercises of stock options increased cash by $0.7 million
- Common shares issued pursuant to exercises of warrants and agent options increased cash by $3.9 million
- Cash on hand at Year End is $17.6 million
Cost-Cutting Measures in Place to Mitigate Loss
The Company’s net loss for the year is $19.1 million, attributed to a one-time non-cash impairment loss of Spire Global Strategy and one-time non-cash loss on disposal of property and equipment as well as increases in general and administrative costs as the Company continued to scale up its operations and added staffing and resources to support the Company’s growth initiatives. The Company continues to incur costs to support its growing infrastructure requirements.
Significant expenditures during the period include property and equipment expenses related to AMA’s 67,750 square foot cultivation facility and 12,160 square foot production facility in Nevada and the purchase of the remaining 9% of Infused for $5.4 million, of which $1.2 million was cash via a promissory note paid during Q4.
The Company saw an overall increase in expenses as it continues to grow in size and scale. The realignment of core business units such as cultivation, extraction and manufacturing assets and cost-cutting measures in place along all divisions have been a focus in order to lower expenses.
Commentary by Mr. Chris Rebentisch, Chief Executive Officer
“Our second year of operations was met by a surge in market volatility, challenging capital markets and a changing regulatory environment. Although not immune to sector-wide stock pressures and volatility, the Company remains positioned with growth and profitability in mind and we continue on target on this path. We are razor-focused on continuing to ensure the long-term viability of the Company. We have implemented cost cutting measures aimed at reducing our current operating expenses, improving efficiencies and strengthening our product offerings while building a sustainable foundation.
Exceeding expectations, we increased revenues by 44% from our previous year while awaiting our new cultivation facility to become operational. We oversaw a 130% growth in revenues for our CBD brand portfolio, as well as a 245% increase of cash to execute on our growth plan. By the end of this fiscal year, we had completed the construction of one of Nevada’s largest indoor cultivation facilities for premium craft cannabis and had begun to transfer our cannabis plants to the new facility.
Subsequent to the Year End, we entered the California market with a management agreement for cultivation and manufacturing in the state and continue to make progress on our infrastructure projects in Nevada, while targeting promising markets in Arizona and Colorado. Our proprietary Canna Hemp™ brands are emerging as significant players in the industry and continue to grow across the nation. We have also attracted some of the best brands in the industry as licensing partners as we continue to increase market share in Nevada as one of the largest wholesalers of cannabis products to legal dispensaries.
We forecast strong revenue growth in 2020 as we expand our proprietary portfolio of AMA branded THC flower and concentrates, continue innovating our unique, differentiated, quality-based CBD Canna Hemp™ portfolio and as our recently added licensing partnerships bear fruit. We anticipate significant margin improvements as we complete the build-out of new cultivation and production facilities in Nevada and become less reliant on wholesale biomass suppliers. With our focused vision on delivering the highest quality consumer branded goods, we have a disciplined growth path to scale up operations in 2020 and beyond.”
Key Developments During Fiscal 2019
- On September 14, 2018, the Company closed its previous short form prospectus offering for $17,250,000.
- On September 17, 2018, the Company appointed Mr. Chris Rebentisch to its Board of Directors.
- On September 18, 2018, the Company changed its name to 1933 Industries Inc. from Friday Night Inc.
- On December 6, 2018, the Company commenced trading on the OTCQX®, the OTC Markets’ premier tier.
- On March 15, 2019, pursuant to a non-brokered private placement, the Company issued 10,000,000 units at $0.45 per unit for gross proceeds of $4,500,000. Each unit consists of one common share and one common share purchase warrant with an exercise price of $0.50 and an expiry date of March 14, 2021.
- On March 28, 2019, the Company announced that it signed a membership interest purchase definitive agreement (“the Agreement”) between the holder of the nine percent (9%) of the issued and outstanding membership interests of Infused MFG, and the Company, the beneficial holder of ninety-one percent (91%) of the issued and outstanding membership interests of Infused MFG. The purchase consideration comprised of 7,000,000 common shares with a fair value of $0.55 per share, 1,000,000 common share purchase warrants with an exercise price of $0.53 and a fair value of $0.30 per warrant and a $1,248,000 (USD$940,000) promissory note with a 6% interest rate per annum and an expiry date of December 1, 2019, for total purchase consideration of $5,395,722.
- On May 3, 2019, Mr. Brayden Sutton was appointed Chairman of the Board in addition to his previous positions as Chief Executive Officer and President.
- On May 15, 2019, the Company reported that its subsidiary, AMA, completed a sale and lease back (the “Sale Transaction”) for its newly constructed cannabis cultivation facility in Las Vegas, Nevada. The purchase price for the Sale Transaction was USD$10,450,000.
- On May 29, 2019, the Company appointed Mr. Chris Rebentisch as Chief Executive Officer.
- On May 30, 2019, the Company appointed Mr. Terry Taouss to its Board of Directors as Mr. Andrew Richards resigned as a Director.
- On June 5, 2019, Mr. Brayden Sutton resigned as the President of the Company and Ms. Ester Vigil was appointed in his stead.
- On June 17, 2019, Mr. Stephen Radusch was appointed Chief Financial Officer of the Company.
- On July 3, 2019, the Company reported that it had received a permanent occupancy permit for its cultivation facility.
- On July 19, 2019, the Company reported that it received both Clark County and Nevada Department of Taxation final approvals for the transfer of its existing cultivation licenses to its new cultivation facility.
Key Developments Subsequent to Fiscal 2019
- On August 15, 2019, the Company reported that it had signed a management services agreement to provide operational and accounting services, as well as general management and oversight to Green Spectrum Trading Inc., a medicinal and recreational cannabis business licensee in the State of California.
- On August 20, 2019, the Company announced that it commenced the transfer of cannabis plants to its new cultivation facility in Las Vegas following an extensive period of systems-wide testing.
- On September 10, 2019, the Company announced the execution of a licensing agreement for the launch of Blonde™, a high-end California brand making its debut in Nevada. Under the terms of the one-year agreement, the Company’s subsidiary, AMA, receives the exclusive rights to cultivate flower, manufacture pre-rolls, live resin vape pens and cartridges under the Blonde™ brand for distribution to licensed dispensaries throughout Nevada.
- On September 19, 2019, the Company announced a licensing agreement with California-based PLUGplay, a manufacturer of cannabis vaporizer cartridges with proprietary magnetic hardware, for a 12-month term. Under the terms of the Agreement, the Company’s subsidiary, AMA, will manufacture distillate and vape pens under the PLUGplay brand, for distribution to dispensaries across Nevada.
- On September 30, 2019, the Company announced that it commenced the flowering cycle of its cannabis plants in its new indoor cultivation facility located in Las Vegas, Nevada.
- On October 22, 2019, the Company reported that the debut of its Blonde™ Cannabis products in September 2019 was its most successful brand launch to date.
- On November 4, 2019, the Company launched its newest product, the Birdhouse CBD Balm by Canna Hemp X™. The CBD Balm was developed in collaboration with Birdhouse Skateboards™, targeting the action sports market and will be available for sale in dispensaries, wellness stores, skate shops and specialty retailers, including Zumiez in the United States.
SOURCE 1933 Industries Inc.
Cannabis
Mikra Announces Partnership with Virun NutraBiosciences Inc. and Releases CELLF 2.0
Cannabis
IM Cannabis Reports First Quarter Financial Results
IMC prepares for accelerated growth after legalization in Germany and recovers from the impact of the Israel-Hamas war.
TORONTO and GLIL YAM, Israel, May 8, 2024 /PRNewswire/ — IM Cannabis Corp. (the “Company” or “IMC“) (NASDAQ: IMCC) (CSE: IMCC), an international medical cannabis company, announced its financial results today for the first quarter ended March 31, 2024. All amounts are reported in Canadian dollars and compared to the quarter ended March 31, 2023, unless otherwise stated.
Q1 2024 Financial Highlights
- 13% Revenue increase vs. Q4 2023 of $12.1M vs. $10.7M and 4% decrease vs. Q1 2023 of $12.5M
- 125% Gross profit increase vs. Q4 2023 of $1.8M vs. $0.8 and 39% Gross profit decrease vs. Q1 2023 of $2.9M
- 29% decrease in operating expenses vs. Q1 2023 excluding the one-time Oranim revoke related losses of $4.6M vs. $6.5M and 14% increase including Oranim
- 12% increase of Non-IFRS Adjusted EBITDA loss to $2.1M
Operational Highlights
The Company intends to complete a non-brokered private placement (the “Offering“) of secured convertible debentures of the Company (each, a “Debenture“) for aggregate proceeds of up to C$2,500,000. The Debentures will mature on the date that is 12 months from the date of issuance and will not incur interest except in the event of default. The Debentures are being issued to holders of short term loans and obligations owed by the Company or its wholly owned subsidiaries. The principal of the Debenture may be converted into common shares in the Company (each, a “Share“) at a conversion price of $1.08 per Share.
Management Commentary
“With the April 1st cannabis legalization in Germany, we are augmenting our focus and resources on the German market, where we expect to see the biggest growth potential, and the best return on investment. While it is still too early to make any predictions, our sales in Germany almost doubled during the month of April,” said Oren Shuster, Chief Executive Officer of IMC. “Looking back on the first month post legalization in Germany, I see that we have the infrastructure and the supply agreements in place to continue delivering the accelerated growth we have already seen in April. We will also ensure that we have the necessary resources in place for success.”
“In 2023 we completely restructured, becoming a very lean and agile company, leaning into active cost management. This process is reflected in the numbers, our G&A decreased 27% vs Q1 2023” said Uri Birenberg, Chief Financial Officer of IMC. “While our results have recovered from the impact of the Israel-Hamas war, our revenue was still effected by both an unfavorable exchange rate, as well as price reductions to sell off inventory.”
Q1 2024 Conference Call
The Company will host a Zoom web conference call today at 9:00 a.m. ET to discuss the results, followed by a question-and-answer session for the investment community. Investors are invited to register by clicking here. All relevant information will be sent upon registration.
If you are unable to join us live, a recording of the call will be available on our website at https://investors.imcannabis.com/ within 24 hours after the call.
Q1 2024 Financial Results
- Revenues for the first quarter of 2024 were $12.1 million compared to $12.5 million in the first quarter of 2023, a decrease of 3%. The decrease is mainly due an exchange rate effect of about $0.2 million and decrease in avg. price per sale due to increased competition.
- Gross profit for the first quarter of 2024 was $1.8 million, compared to $2.9 million in Q1 2024, a decrease of 39%. The downside is attributed mainly to the slow-moving stock that was moved out at a lower price and an exchange rate difference totaling $0.4 million and $0.64 million cost of sales loss due to an inventory erase of the slow-moving stock. Company fair value adjustment was $0 and $0.4 million for the Q1 2024 and Q1 2023 respectively.
- Total Dried Flower sold in Q1 2024 was approximately 1,873 kg with an average selling price of $5.68 per gram, compared to approximately 1,842kg in Q1 2023, with an average selling price of $6.59 per gram. This difference is mainly due to increased competition within the retail segment, and mid-range stock discounts to move out slow moving stock.
- Total operating expenses in Q1 2024 were $7.4 million compared to $6.5 million in Q1 2023. The increase is due to the other operating expenses related to Oranim Deal revoke, with an expected losses of $2.8 million. Adjusting for this one-time losses, Q1 2024 operating expenses were $4.6 million compared to $6.5 million in Q1 2023, a decrease of 29%.
- G&A Expenses in Q1 2024 were $2.3 million, compared to $3.2 million in Q1 2023, a decrease of 28%. The decrease in the G&A expense is attributable mainly to salaries and professional services of $0.64 million.
- Selling and Marketing Expenses in Q1 2024 were $2.3 million, compared to $2.8 million in Q1 2023, a decrease of 18% mainly due to a decrease in Salaries and professional services of $0.5 million.
- Net Loss from continuing operations in Q1 2024 was $6.0 million, compared to $0.9 million in Q12023.
- Basic and diluted Loss per Share in Q1 2024 was $0.42, compared to a loss of $0.05 per Share in Q1 2023.
- Non-IFRS Adjusted EBITDA loss in Q1 2024 was $2.1 million, compared to an Adjusted EBITDA loss of $1.9 million in Q1 2023 an increase of 10%.
- Cash and Cash Equivalents as of March 31, 2024, were $1.0 million compared to $1.8 million in December 31, 2023.
- Total assets as of March 31, 2024, were $41.1 million, compared to $48.8 million in December 31, 2023, a decrease of 16%. The decrease is mainly attributed to the goodwill reduction due to Oranim agreement cancelation of about $2.8M, a reduction in Inventory of $2.1 million, reduction of Cash and cash equivalents of $0.8M and reduction in Trade payables of $1.2 million.
- Total Liabilities as of March 31, 2024, were $32.8 million, compared to $35.1 in December 31, 2023, a decrease of about 7%. The decrease was mainly due to the reduction in other accounts payables and accrued expenses of $1.8 million and reduction in the PUT option liability of $0.7 million.
The Company’s financial statements as of March 31, 2024 includes a note regarding the Company’s ability to continue as a going concern. The Company’s Q1 2024 financial results do not include any adjustments relating to the recoverability and classification of assets or liabilities that might be necessary should the Company be unable to continue as a going concern. For more information, please refer to the “Liquidity and Capital Resources” and “Risk Factors” sections in the Company’s management’s discussion and analysis for the quarter ended March 31, 2024.
Non-IFRS Measures
This press release makes reference to “Gross Margin” and “Adjusted EBITDA”, which are financial measures that are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. These measures are provided as complementary information to the Company’s IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should neither be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.
For an explanation of how management defines Gross Margin and Adjusted EBITDA, see the Company’s management’s discussion and analysis for the period ended March 31, 2024, available under the Company’s SEDAR+ profile at www.sedarplus.ca on EDGAR at www.sec.gov/edgar.
We reconcile these non-IFRS financial measures to the most comparable IFRS measures as set out below.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
||||||
Canadian Dollars in thousands |
||||||
March 31, |
December 31, |
|||||
Note |
(Unaudited) |
|||||
ASSETS |
||||||
CURRENT ASSETS: |
||||||
Cash and cash equivalents |
$ 1,048 |
$ 1,813 |
||||
Trade receivables |
6,506 |
7,651 |
||||
Advances to suppliers |
780 |
936 |
||||
Other accounts receivable |
3,732 |
3,889 |
||||
Inventories |
3 |
7,901 |
9,976 |
|||
19,967 |
24,265 |
|||||
NON-CURRENT ASSETS: |
||||||
Property, plant and equipment, net |
4,939 |
5,058 |
||||
Investments in affiliates |
2,078 |
2,285 |
||||
Right-of-use assets, net |
1,243 |
1,307 |
||||
Intangible assets, net |
5,440 |
5,803 |
||||
Goodwill |
7,442 |
10,095 |
||||
21,142 |
24,548 |
|||||
Total assets |
$ 41,109 |
$ 48,813 |
||||
The accompanying notes are an integral part of the interim condensed consolidated financial statements. |
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
||||||
Canadian Dollars in thousands |
||||||
March 31, |
December 31, |
|||||
Note |
(Unaudited) |
|||||
LIABILITIES AND EQUITY |
||||||
CURRENT LIABILITIES:
|
||||||
Trade payables |
$ 9,511 |
$ 9,223 |
||||
Bank loans and credit facilities |
11,941 |
12,119 |
||||
Other accounts payable and accrued expenses |
4,440 |
6,218 |
||||
Accrued purchase consideration liabilities |
2,165 |
2,097 |
||||
PUT Option liability |
1,967 |
2,697 |
||||
Current maturities of operating lease liabilities |
461 |
454 |
||||
30,485 |
32,808 |
|||||
NON-CURRENT LIABILITIES:
|
||||||
Warrants measured at fair value |
4 |
137 |
38 |
|||
Operating lease liabilities |
744 |
815 |
||||
Long-term loans |
401 |
394 |
||||
Employee benefit liabilities, net |
96 |
95 |
||||
Deferred tax liability, net |
902 |
963 |
||||
2,280 |
2,305 |
|||||
Total liabilities |
32,765 |
35,113 |
||||
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY: |
5 |
|||||
Share capital and premium |
253,887 |
253,882 |
||||
Translation reserve |
1,399 |
95 |
||||
Reserve from share-based payment transactions |
9,664 |
9,637 |
||||
Accumulated deficit |
(255,431) |
(249,145) |
||||
Total equity attributable to equity holders of the Company |
9,519 |
14,469 |
||||
Non-controlling interests |
(1,175) |
(769) |
||||
Total equity |
8,344 |
13,700 |
||||
Total liabilities and equity |
$ 41,109 |
$ 48,813 |
||||
The accompanying notes are an integral part of the interim condensed consolidated financial statements. |
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS |
||||||
AND OTHER COMPREHENSIVE INCOME (UNAUDITED) |
||||||
Canadian Dollars in thousands, except per share data |
||||||
Three months ended March 31, |
||||||
Note |
2024 |
2023 (*) |
||||
Revenues |
$ 12,063 |
$ 12,529 |
||||
Cost of revenues |
10,274 |
9,286 |
||||
Gross profit before fair value adjustments |
1,789 |
3,243 |
||||
Fair value adjustments: |
||||||
Realized fair value adjustments on inventory sold in the period |
(10) |
(339) |
||||
Total fair value adjustments |
(10) |
(339) |
||||
Gross profit |
1,779 |
2,904 |
||||
General and administrative expenses |
2,332 |
3,175 |
||||
Selling and marketing expenses |
2,292 |
2,805 |
||||
Restructuring expenses |
– |
283 |
||||
Share-based compensation |
32 |
258 |
||||
Other operating expenses |
9 |
2,753 |
– |
|||
Total operating expenses |
7,409 |
6,521 |
||||
Operating loss |
5,630 |
3,617 |
||||
Finance income |
4 |
(14) |
3,530 |
|||
Finance expense |
(487) |
(795) |
||||
Finance income, net |
(501) |
2,735 |
||||
Gain (loss) before income taxes |
(6,131) |
(882) |
||||
Income tax benefit |
(111) |
(16) |
||||
Net )loss( gain |
(6,020) |
(866) |
||||
Other comprehensive income that will not be reclassified to profit or loss in |
||||||
Total other comprehensive income that will not be reclassified to profit or loss |
67 |
36 |
||||
Exchange differences on translation to presentation currency |
1,330 |
(562) |
||||
Total other comprehensive income (loss) that will not be reclassified to profit |
1,397 |
(526) |
||||
Other comprehensive income that will be reclassified to profit or loss in |
||||||
Adjustments arising from translating financial statements of foreign operation |
(35) |
155 |
||||
Total other comprehensive income (loss) that will be reclassified to profit or loss |
(35) |
155 |
||||
Total other comprehensive income (loss) |
1,362 |
(371) |
||||
Total comprehensive loss |
$ (4,658) |
$ (1,237) |
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS |
||||||
AND OTHER COMPREHENSIVE INCOME (UNAUDITED) |
||||||
Canadian Dollars in thousands, except per share data |
||||||
Three months ended March 31, |
||||||
Note |
2024 |
2023 (*) |
||||
Net income (loss) attributable to: |
||||||
Equity holders of the Company |
(5,623) |
(600) |
||||
Non-controlling interests |
(397) |
(266) |
||||
$ (6,020) |
$ (866) |
|||||
Total comprehensive income (loss) attributable to: |
||||||
Equity holders of the Company |
(4,252) |
(959) |
||||
Non-controlling interests |
(406) |
(278) |
||||
$ (4,658) |
$ (1,237) |
|||||
Net income (loss) per share attributable to equity holders of the Company: |
7 |
|||||
Basic and diluted (loss) gain per share (in CAD) |
$ (0.42) |
$ (0.05) |
||||
Earnings (loss) per share attributable to equity holders of the Company |
||||||
Basic and diluted (loss) gain per share (in CAD) |
$ (0.42) |
$ (0.05) |
||||
(*) See note 1 regarding figures disclosure. |
||||||
The accompanying notes are an integral part of the interim condensed consolidated financial statements. |
||||||
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
||||
Canadian Dollars in thousands |
||||
Three months ended March 31, |
||||
2024 |
2023 (*) |
|||
Cash provided by operating activities: |
||||
Net income (loss) for the period |
$ (6,020) |
$ 43 |
||
Adjustments for non-cash items: |
||||
Fair value adjustment on sale of inventory |
10 |
339 |
||
Fair value adjustment on Warrants, investments and accounts receivable |
100 |
(3,636) |
||
Depreciation of property, plant and equipment |
147 |
174 |
||
Amortization of intangible assets |
452 |
456 |
||
Depreciation of right-of-use assets |
118 |
179 |
||
Impairment of goodwill |
2,753 |
– |
||
Finance expenses, net |
401 |
635 |
||
Deferred tax liability, net |
(69) |
(150) |
||
Share-based payment |
32 |
258 |
||
Restructuring expense |
– |
283 |
||
3,944 |
(1,462) |
|||
Changes in working capital: |
||||
Decrease (increase) in trade receivables |
1,332 |
1,937 |
||
Decrease (increase) in other accounts receivable and advances to suppliers |
159 |
(940) |
||
Decrease (increase) in inventories, net of fair value adjustments |
2,159 |
90 |
||
Decrease (increase) in trade payables |
663 |
(6,021) |
||
Changes in employee benefit liabilities, net |
– |
(22) |
||
Increase in other accounts payable and accrued expenses |
(2,745) |
(14) |
||
1,568 |
(4,970) |
|||
Taxes (paid) received |
(121) |
328 |
||
Net cash used in operating activities |
(629) |
(6,061) |
||
Cash flows from investing activities: |
||||
Purchase of property, plant and equipment |
(2) |
(411) |
||
Payment of purchase consideration |
– |
(56) |
||
Net cash used in investing activities |
$ (2) |
$ (467) |
||
The accompanying notes are an integral part of the interim condensed consolidated financial statements. |
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
||||
Canadian Dollars in thousands |
||||
Three months ended March 31, |
||||
2024 |
2023 |
|||
Cash flow from financing activities: |
||||
Proceeds from issuance of share capital, net of issuance costs |
176 |
825 |
||
Proceeds from issuance of warrants |
(176) |
7,027 |
||
Repayment of lease liability |
(118) |
(175) |
||
Interest paid – lease liability |
(15) |
(18) |
||
Receipt (repayment) of bank loan and credit facilities |
(2,856) |
(1,046) |
||
Cash paid for interest |
(444) |
(56) |
||
Proceeds from discounted checks |
2,581 |
|||
Net cash (used in) provided by financing activities |
(852) |
6,557 |
||
Effect of foreign exchange on cash and cash equivalents |
718 |
(1,059) |
||
Decrease in cash and cash equivalents |
(765) |
(1,030) |
||
Cash and cash equivalents at beginning of the period |
1,813 |
2,449 |
||
Cash and cash equivalents at end of the period |
$ 1,048 |
$ 1,419 |
||
Supplemental disclosure of non-cash activities: |
||||
Right-of-use asset recognized with corresponding lease liability |
$ 40 |
$ 49 |
||
Issuance of shares in payment of debt settlement to a non-independent director of the company |
$ – |
$ 222 |
||
(*) See note 1 regarding Figures disclosure. |
||||
The accompanying notes are an integral part of the interim condensed consolidated financial statements. |
About IM Cannabis Corp.
IMC (Nasdaq: IMCC) (CSE: IMCC) is an international cannabis company that provides premium cannabis products to medical patients in Israel and Germany, two of the largest medical cannabis markets. The Company has exited operations in Canada to pivot its focus and resources to achieve sustainable and profitable growth in its highest value markets, Israel and Germany. The Company leverages a transnational ecosystem powered by a unique data-driven approach and a globally sourced product supply chain. With an unwavering commitment to responsible growth and compliance with the strictest regulatory environments, the Company strives to amplify its commercial and brand power to become a global high-quality cannabis player.
The IMC ecosystem operates in Israel through Focus Medical Herbs Ltd., which imports and distributes cannabis to medical patients, leveraging years of proprietary data and patient insights. The Company also operates medical cannabis retail pharmacies, online platforms and logistical hubs in Israel that enable the safe delivery and quality control of IMC products throughout the entire value chain. In Germany, the IMC ecosystem operates through Adjupharm GmbH, where it distributes cannabis to pharmacies for medical cannabis patients. The Company also operated in Canada through Trichome Financial Corp and its wholly owned subsidiaries. The Company has exited operations in Canada and considers these operations as discontinued.
Disclaimer for Forward-Looking Statements
This press release contains forward-looking information or forward-looking statements under applicable Canadian and United States securities laws (collectively, “forward-looking statements“). All information that addresses activities or developments that we expect to occur in the future are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “expect”, “likely” and “intend” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made. In the press release, such forward-looking statements include, but are not limited to, statements relating to: the impact of the Israel-Hamas war on the Company, including its operations and the medical cannabis industry in Israel; the timing and impact of the legalization of medicinal cannabis in Germany, including, the Company having it “all in house”; the Company being positioned to take advantage of the legalization; the Company’s growth in 2024; the market growth for medicinal cannabis in Germany; the stated benefits of the Company’s EU-GMP processing facility and an EU-GDP logistics center; the Company to host a teleconference meeting as stated; and the Company’s stated goals, scope, and nature of operations in Germany, Israel, and other jurisdictions the Company may operate.
Forward-looking statements are based on assumptions that may prove to be incorrect, including but not limited to: the Company’s ability to focus and resources to achieve sustainable and profitable growth in its highest value markets; the Company’s ability to mitigate the impact of the Israel-Hamas war on the Company; the Company’s ability to take advantage of the legalization of medicinal cannabis in Germany; the Company’s ability to host a teleconference meeting as stated; and the Company’s ability to carry out its stated goals, scope, and nature of operations in Germany, Israel, and other jurisdictions the Company may operate.
The above lists of forward-looking statements and assumptions are not exhaustive. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated or implied by such forward-looking statements due to a number of factors and risks. These include: the failure of the Company to comply with applicable regulatory requirements in a highly regulated industry; unexpected changes in governmental policies and regulations in the jurisdictions in which the Company operates; the Company’s ability to continue to meet the listing requirements of the Canadian Securities Exchange and the NASDAQ Capital Market; any unexpected failure to maintain in good standing or renew its licenses; the ability of the Company and its subsidiaries (collectively, the “Group“) to deliver on their sales commitments or growth objectives; the reliance of the Group on third-party supply agreements to provide sufficient quantities of medical cannabis to fulfil the Group’s obligations; the Group’s possible exposure to liability, the perceived level of risk related thereto, and the anticipated results of any litigation or other similar disputes or legal proceedings involving the Group; the impact of increasing competition; any lack of merger and acquisition opportunities; adverse market conditions; the inherent uncertainty of production quantities, qualities and cost estimates and the potential for unexpected costs and expenses; risks of product liability and other safety-related liability from the usage of the Group’s cannabis products; supply chain constraints; reliance on key personnel; the risk of defaulting on existing debt; risks surrounding war, conflict and civil unrest in Eastern Europe and the Middle East, including the impact of the Israel-Hamas war on the Company, its operations and the medical cannabis industry in Israel; risks associated with the Company focusing on the Israel and Germany markets; the inability of the Company to achieve sustainable profitability and/or increase shareholder value; the inability of the Company to actively manage costs and/or improve margins; the inability of the company to grow and/or maintain sales; the inability of the Company to meet its goals and/or strategic plans; the inability of the Company to reduce costs and/or maintain revenues; the Company’s inability to take advantage of the legalization of medicinal cannabis in Germany; and the Company’s inability to host a teleconference meeting as stated.
Please see the other risks, uncertainties and factors set out under the heading “Risk Factors” in the Company’s annual report dated March 28, 2024, which is available on the Company’s issuer profile on SEDAR+ at www.sedarplus.ca and Edgar at www.sec.gov/edgar. Any forward-looking statement included in this press release is made as of the date of this press release and is based on the beliefs, estimates, expectations and opinions of management on the date such forward looking information is made. The Company does not undertake any obligation to update forward-looking statements except as required by applicable securities laws. Investors should not place undue reliance on forward-looking statements. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
Company Contact:
Anna Taranko, Director Investor & Public Relations
IM Cannabis Corp.
+49 157 80554338
[email protected]
Oren Shuster, CEO
IM Cannabis Corp.
+972-77-3603504
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View original content:https://www.prnewswire.co.uk/news-releases/im-cannabis-reports-first-quarter-financial-results-302139688.html
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