Connect with us

Cannabis

Veritas Pharma Announces Corrections to Financial Disclosures

Published

on

Vancouver, British Columbia–(Newsfile Corp. – May 21, 2020) – Veritas Pharma Inc. (CSE: VRT) (OTC Pink: VRTHF) (FSE: 2VP) (“Veritas” or the “Company”) wishes to announce that as a result of a review of its continuous disclosures record by the British Columbia Securities Commission (“BCSC”) on May 20th, 2020, the company has amended and re-filed three sets of its interim financial statements and MD&A. for the following dates: October 31, 2018; January 31, 2019; April 30th, 2019.

A detailed description of the changes made to the financial statements dated October 31, 2018; January 31, 2019; and April 30th, 2019 is provided below.

Restatements for October 31st, 2018 Financial Statements

The Company has restated its consolidated financial statements as at October 31, 2018 and for the three and six months ended to reflect the following:

  1. Write-off the $1,000,000 advance to Liht Cannabis Corp. (formerly Marapharm Ventures Inc.) as an unauthorized payment. Reversal of accrued interest recorded for this advance.

  2. Reclassification of amounts due from related parties from amounts receivable.

  3. Adjustment to the fair value of shares issued for the advance for the investment in 3 Carbon Extractions Inc. from $375,000 to $367,500.

  4. Reclassification of loan receivable from Springbank Capital Partners, LLC to non-current.

  5. Reclassification of certain related party payables to accounts payable and accrued liabilities to be consistent with comparative amounts.

Consolidated statement of financial position

  As At October 31, 2018
 
 
As Reported
$
Adjustment
$
As Restated
$
ASSETS      
Current assets      
Amounts receivable 134,203 (93,216 ) 40,987
Loans receivable 1,144,087 (1,144,087 )
Due from related parties 93,673 93,673
Total current assets 1,389,312 (1,143,630 ) 245,682
Non-current assets      
Loan receivable 108,561 108,561
Advance for investment 767,500 767,500
Investment 2,035,000 (785,000 ) 1,250,000
Total non-current assets 4,007,977 91,061 4,099,038
Total assets 5,397,289 (1,052,569 ) 4,344,720
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities 268,067 68,117 336,184
Due to related party 115,123 (68,117 ) 47,006
Total liabilities 383,190 383,190
Shareholders’ equity
Share capital 23,052,704 (29,351 ) 23,023,353
Share-based payment reserve 673,159 21,851 695,010
Deficit (20,655,899 ) (1,045,069 ) (21,700,968 )
Total shareholders’ equity 5,014,099 (1,052,569 ) 3,961,530
Total liabilities and shareholders’ equity 5,397,289 (1,052,569 ) 4,344,720

 

Consolidated statements of operations and comprehensive loss

  Three Months Ended October 31, 2018  
  As Reported
$
Adjustment
$
As Restated
$
Expenses
Professional fees 74,215 10,000 84,215
Total expenses 1,235,002 10,000 1,245,002
Loss before other income (expense) (1,235,002 ) (10,000 ) (1,245,002 )
Other income (expense)
Interest income 35,527 (35,422 ) 105
Interest and bank charges (353 ) 353
Unauthorized payment (1,000,000 ) (1,000,000 )
Total other income (expense) 35,174 (1,035,069 ) (999,895 )
Net loss and comprehensive loss for the period (1,199,828 ) (1,045,069 ) (2,244,897 )
Basic and diluted loss per share (0.02 ) (0.01 ) (0.03 )
Expenses
Professional fees 95,722 10,000 105,722
Total expenses 1,988,353 10,000 1,998,353
Loss before other income (expense) (1,988,353 ) (10,000 ) (1,998,353 )
Other income (expense)
Interest income 35,527 (35,422 ) 105
Interest and bank charges (353 ) 353
Unauthorized payment (1,000,000 ) (1,000,000 )
Total other income (expense) 35,174 (1,035,069 ) (999,895 )
Net loss and comprehensive loss for the period (1,953,169 ) (1,045,069 ) (2,998,238 )
Basic and diluted loss per share (0.03 ) (0.01 ) (0.04 )

 

Consolidated statement of changes in equity

  Six Months Ended October 31, 2018
  As Reported
$
Adjustment
$
As Restated
$
Share capital 23,052,704 (29,351 ) 23,023,353
Share-based payment reserve 673,159 21,851 695,010
Deficit (20,655,899 ) (1,045,069 ) (21,700,968 )
Total shareholders’ equity 5,014,099 (1,052,569 ) 3,961,530

 

Consolidated statement of cash flows

  Six Months Ended October 31, 2018
  As Reported
$
Adjustment
$
As Restated
$
Operating activities
Net loss for the period (1,953,169 ) (1,045,069 ) (2,998,238 )
Items not involving cash:
Depreciation 6,670 5,596 12,266
Changes in non cash operating working capital:
Amounts receivable (127,538 ) 93,216 (34,322 )
Loans receivable (1,144,087 ) 1,144,087
Accounts payable and accrued liabilities 260,903 (129,528 ) 131,375
Due to/from related parties 35,855 35,855
Net cash used in operating activities (2,134,146 ) 104,157 (2,029,989 )
Investing activities
Investments (2,035,000 ) 2,035,000
Advance for acquisition of 3 Carbon (400,000 ) (400,000 )
Purchase of investment in 1182372 B.C. Ltd. (1,250,000 ) (1,250,000 )
Loan to Springbank Capital Partners, LLC (108,561 ) (108,561 )
Purchase of property and equipment (33,706 ) (5,596 ) (39,302 )
Net cash used in investing activities (2,068,706 ) 270,843 (1,797,863 )
Financing activities
Shares issued for acquisition 375,000 (375,000 )
Proceeds from issuance of shares and shares
subscriptions  received
1,510,000 207,500 1,717,500
Proceeds from exercise of stock options 207,500 (207,500 )
Net cash provided by financing activities 2,072,500 (375,000 ) 1,697,500

 

Restatements for January 31st, 2019 Financial Statements

The Company has restated its consolidated financial statements as at January 31, 2019 and for the three and nine months then ended to reflect the following:

  1. Write-down of amounts due from related parties.

  2. Write-off the $1,000,000 advance to Liht Cannabis Corp. (formerly Marapharm Ventures Inc.) as an unauthorized payment. Reversal of accrued interest recorded for this advance.

  3. Adjustment to the fair value of shares issued to acquire shares of Indigenous Bloom Corp. from $5,000,000 to $4,166,666.

  4. Adjustment to the fair value of shares issued for the advance for the investment in 3 Carbon Extractions Inc. from $375,000 to $367,500.

  5. Reclassified the $180,000 advance from Leis Industries Limited from accounts payable and accrued liabilities to advance payable.

Consolidated statement of financial position

  As At January 31, 2019
  As Reported
$
Adjustment
$
As Restated
$
ASSETS
Current assets
Amounts receivable 68,395 (11,776 ) 56,619
Loans receivable 1,169,840 (1,060,274 ) 109,566
Due from related parties 94,243 (94,243 )
Total current assets 1,397,747 (1,166,293 ) 231,454
Non-current assets
Advance for investment 767,500 767,500
Investments 7,035,000 (1,618,334 ) 5,416,666
Total non-current assets 9,000,594 (850,834 ) 8,149,760
Total assets 10,398,341 (2,017,127 ) 8,381,214
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities 727,074 (180,000 ) 547,074
Advance payable 180,000 180,000
Total liabilities 794,438 794,438
Shareholders’ equity
Share capital 29,612,704 (847,685 ) 28,750,019
Share-based payment reserve 684,945 21,851 706,796
Deficit (21,377,881 ) (1,176,293 ) (22,554,174 )
Total shareholders’ equity 9,603,903 (2,002,127 ) 7,586,776
Total liabilities and shareholders’ equity 10,398,341 (2,002,127 ) 8,381,214

 

Consolidated statements of operations and comprehensive loss

  Three Months Ended January 31, 2019
  As Reported
$
Adjustment
$
As Restated
$
Expenses
Depreciation 7,891 (1,500 ) 6,391
Office and miscellaneous 17,932 1,500 19,432
Total expenses 747,573 747,573
Loss before other income (expense) (747,573 ) (747,573 )
Other income (expense)
Interest income 25,693 (25,307 ) 386
Interest and bank charges (102 ) 102
Write off of related party receivables (106,019 ) (106,019 )
Total other income (expense) 25,591 (131,224 ) (105,633 )
Net loss and comprehensive loss for the period (721,982 ) (131,224 ) (853,206 )
Basic and diluted loss per share (0.07 ) (0.02 ) (0.09 )

 

  Nine Months Ended January 31, 2019
  As Reported
$
Adjustment
$
As Restated
$
Expenses
Depreciation 20,157 (1,500 ) 18,657
Office and miscellaneous 62,987 1,500 64,487
Professional fees 149,503 10,000 159,503
Total expenses 2,735,916 10,000 2,745,916
Loss before other income (expense) (2,735,916 ) (10,000 ) (2,745,916 )
Other income (expense)
Interest income 61,220 (60,729 ) 491
Interest and bank charges (455 ) 455
Unauthorized payment (1,000,000 ) (1,000,000 )
Write off of related party receivables (106,019 ) (106,019 )
Total other income (expense) 60,765 (1,166,298 ) (1,105,528 )
Net loss and comprehensive loss for the period (2,675,151 ) (1,176,293 ) (3,851,444 )
Basic and diluted loss per share (0.33 ) (0.15 ) (0.48 )

 

Consolidated statement of changes in equity

  Nine Months Ended January 31, 2019
  As Reported
$
Adjustment
$
As Restated
$
Share capital 29,612,704 (855,185 ) 28,757,519
Share-based payment reserve 684,945 21,851 706,796
Deficit (21,377,881 ) (1,176,293 ) (22,554,174 )
Total shareholders’ equity 9,603,903 (2,009,627 ) 7,594,276

 

Consolidated statement of cash flows

  Nine Months Ended January 31, 2019
  As Reported
$
Adjustment
$
As Re-stated
$
Operating activities
Net loss for the period (2,675,151 ) (1,176,293 ) (3,851,444 )
Items not involving cash:
Depreciation 20,157 (1,500 ) 18,657
Shares issued for services 300,000 300,000
Write-off of related party receivables 106,019 106,019
Changes in non cash operating working capital:
Amounts receivable (61,730 ) 11,776 (49,954 )
Loans receivable (1,169,840 ) 1,169,840
Accounts payable and accrued liabilities 877,908 (535,643 ) 342,265
Due to/from related parties 43,867 43,867
Net cash used in operating activities (2,108,395 ) (81,934 ) (2,190,329 )
Investing activities
Investments (7,035,000 ) 7,035,000
Advance for acquisition of 3 Carbon (400,000 ) (400,000 )
Purchase of investment in 1182372 B.C. Ltd. (1,250,000 ) (1,250,000 )
Cash acquired from advance payable 180,000 180,000
Loan to Springbank Capital Partners, LLC (109,566 ) (109,566 )
Purchase of property and equipment (39,810 ) 1,500 (38,310 )
Net cash used in investing activities (7,074,810 ) 5,456,934 (1,617,876 )
Financing activities
Shares issued for acquisitions 6,635,000 (6,635,000 )
Proceeds from issuance of shares and shares
subscriptions received
394,500 1,323,000 1,717,500
Proceeds from exercise of stock options 63,000 (63,000 )
Net cash provided by financing activities 7,072,500 (5,375,000 ) 1,697,500

 

Restatements for April 30th, 2019 Financial Statements

The Company has restated its consolidated financial statements for the year ended April 30, 2019 to reflect the write-off of the $1,000,000 advance to Liht Cannabis Corp. as an unauthorized payment and to improve disclosures relating to various impairments recognized.

Consolidated statements of operations and comprehensive loss

  Year Ended April 30, 2019
  As Reported
$
Adjustment
$
As Restated
$
Other income (expense)
Impairment of loans receivable (1,214,580 ) 1,000,000 (214,580 )
Unauthorized payment (1,000,000 ) (1,000,000 )
Total other income (expense) (8,659,513 ) (8,659,513 )

 

Consolidated statement of cash flows

  Year Ended April 30, 2019
  As Reported
$
Adjustment
$
As Re-Stated
$
Operating activities
Items not involving cash:
Impairment of loans receivable 1,214,580 (1,000,000 ) 214,580
Net cash used in operating activities (1,244,932 ) (1,000,000 ) (2,244,932 )
Investing activities
Loan to Liht Cannabis Corp. (1,000,000 ) 1,000,000
Net cash used in investing activities (2,609,068 ) 1,000,000 (1,609,068 )

 

About Veritas Pharma

Veritas Pharma Inc. has developed some intellectual property relating to various cannabis strains. It is the Company’s aim to advance the science behind medical cannabis, by developing the most effective cannabis based treatments for specific disease conditions and acquire income producing assets in the cannabis industry. The Company’s mission is to commercialize its proprietary cannabis products. In addition, Veritas aims to utilize its expertise to enter into mergers and acquisitions with various cannabis industry participants in order to generate revenue by the end of the second quarter of 2020.

Veritas Pharma Inc. is a publicly traded company in Canada, on the Canadian Securities Exchange under the ticker VRT; in the United States, on the OTC under the ticker VRTHF; and in Germany, on the Frankfurt exchange under the ticker 2VP.

For more information, please visit our website: veritaspharmainc.com

On behalf of the Board of Directors

Peter McFadden”
Peter McFadden
Interim Chief Executive Officer & CFO

Further information about the Company is available on our website at www.veritaspharmainc.com or under our profile on SEDAR at www.sedar.com, and on the CSE website at www.thecse.com.

Investor and Public Relations Contact

Veritas Pharma Inc.
Telephone: +1.416.918.6785
Email: [email protected]
Website: www.veritaspharmainc.com

The CSE has not reviewed, nor approved or disapproved the content of this press release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/56270

Cannabis

IM Cannabis Reports 2023 Financial Results

Published

on

im-cannabis-reports-2023-financial-results

TORONTO and GLIL YAM, Israel, March 28, 2024 /PRNewswire/ — IM Cannabis Corp. (the “Company” or “IMC“) (NASDAQ: IMCC) (CSE: IMCC), an international medical cannabis company, announced its financial and operational results for the year ended December 31, 2023, the highlights of which are included in this news release. All figures are reported in Canadian dollars. The Company’s full set of consolidated audited financial statements for the years ended December 31, 2023 and 2022 (the “Annual Financial Statements“) and accompanying management’s discussion and analysis (the “Annual MD&A“) can be accessed by visiting the Company’s website at https://investors.imcannabis.com/, and its profile pages on SEDAR+ at www.sedarplus.ca, and EDGAR at http://www.sec.gov/edgar.

FINANCIAL HIGHLIGHTS FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2023

  • Revenue decreased to $48.8 million for the fiscal year ended December 31, 2023 (compared to $53.3 in 2022), representing a decrease of 10%.
    • Primarily due to negative currency fluctuations and the impact of the Israel-Hamas war on the Company’s operations.
  • Revenue decreased to $10.7 million for the three months ended December 31, 2023 (compared to $14.5 million in 2022), representing a decrease of 26%.
    • Primarily due to the interruption on the Company’s supply chain caused by the Israel-Hamas war and the Company discounting certain outstanding inventory at lower prices.
  • Gross profit increased to $9.8 million for the fiscal year ended December 31, 2023 (compared to $9.2 million in 2022), representing an increase of 7.5%
  • Gross profit decreased to $0.8 million for the three months ended December 31, 2023 (compared to $2.6 million in 2022), representing a decrease of 68%
    • Primarily due to the interruption on the Company’s supply chain caused by the Israel-Hamas war and the Company discounting certain outstanding inventory at lower prices.
    • The Company’s fair value adjustment was approximately $1 million for the fiscal year ended December 31, 2023 (compared to $2.1 million in 2022).
  • G&A expenses decreased to $11 million for the fiscal year ended December 31, 2023 (compared to $21.5 million in 2022), representing an decrease of 49%
  • G&A expenses decreased to $3.3 million for the three months ended December 31, 2023 (compared to $9.8 million in 2022), representing a decrease of 66%
    • Primarily due to the impairment on Y2022 and restructuring and HC adjustments in 2023.
  • Selling and marketing expenses decreased to $10.8 million for the fiscal year ended December 31, 2023 (compared to $11.5 million in 2022), representing an decrease of 6%
  • Selling and marketing expenses decreased to $2.8 million for the three months ended December 31, 2023 (compared to $3.1 million in 2022), representing a decrease of 10%
    • Primarily due to a decrease in share based compensation payments and a restructuring of the Company’s personnel.
  • Net Loss from continuing operations for the fiscal year ended December 31, 2023 was $10.2 million, as compared to $24.9 million in 2022.
  • Net Loss from continuing operations for the three months ended December 31, 2023 was $3.5 million, as compared to a Net Loss of $9.6 million in the fourth quarter of 2022.
  • Diluted Loss per Share for the fiscal year ended December 31, 2023 was $0.74, compared to a loss of $3.81 per Share in 2022.
  • Diluted Loss per Share for the three months ended December 31, 2023  was $(0.25), compared to a basic loss of $)2.94( per share and a diluted loss of $)3.55( per share in for the three months ended December 31, 2022.
  • Cash and Cash Equivalents as of December 31, 2023, was $1.8 million, compared to $2.4 million as of December 31, 2022. 
  • Total assets were $48.8 million as of December 31, 2023, compared to $60.7 million as of December 31, 2022, representing a decrease of 20%.
    • Primarily attributed to an inventory reduction of about $6.6 million, a reduction in other current assets of $1.8 million and a reduction of non-current assets of about $3.5 million
  • Total Liabilities were $35.1 million as of December 31, 2023, compared to $36.9 as of December 31, 2022, representing a decrease of about 5%. 
    • Primarily attributed to a reduction in trade payables of $6.1 million.
  • Operating expenses decreased to $22.6 million for the year ended December 31, 2023 (compared to $40 million in 2022), representing a decrease of 43%
  • Operating expenses decreased to $6 million for the three months ended December 31, 2023 (compared to $13.3 million in 2022), representing a decrease of 55%
  • Adjusted EBITDA1 decreased to $8 million for the year ended December 31, 2023, (compared to $11.5 in 2022), representing a decrease of 30%
  • Total Dried Flower sold in 2023 was approximately 8,609 kg with an average selling price of $5.14 per gram (compared to approximately 6,794kg, with an average selling price of $7.12 per gram in 2022).
    • Primarily due to increased competition within the retail segment and the Company discounting certain outstanding inventory at lower prices.
  • Total Dried Flower sold in the fourth quarter of 2023 was about 2,082kg with an average selling price of $4.52 per gram (compared to about 2,334kg with an average selling price of $5.19 per gram in 2022).
    • Primarily due to increased competition within the retail segment and the Company discounting certain outstanding inventory at lower prices.

The Annual Financial Statements include a note regarding the Company’s ability to continue as a going concern. The Annual Financial Statements 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 2023 Annual MD&A.

Management Commentary

“IMC Germany delivered accelerated growth in 2023, growing 181% from $252K in 2022 to $709K in 2023. During this time, IMC Germany was #1 in sales per stock keeping unit and posted the highest growth against its competitors in the German market.2 With the regulatory rescheduling of cannabis in Germany set to occur effective April 1st, the Company hopes to continue its growth in the market as the market evolves,” said Oren Shuster, Chief Executive Officer of IMC. “In addition, as we are constantly looking for opportunities to maximize shareholder value, we are hopeful that our potential reverse merger with Israel-based Kadimastem Ltd., a clinical cell therapy public company traded on the Tel Aviv stock exchange under the symbol (TASE: KDST) will proceed as expected, which we believe will create significant value for the shareholders.”

“As previously warned and as expected, unfortunately, the Israel-Hamas war had a negative impact on our fourth quarter 2023 results, which weighed on our full year results. Due to the ongoing conflict, there was a 6% decrease in our yearly revenue. Coupled with our fourth quarter of 2023 inventory reduction, the war caused our fourth quarter gross profit to decrease by 68% as compared to the fourth quarter of 2022. However, our gross profit for 2023 increased by 7.5% to $9.8 million as compared to last year,” said Uri Birenberg, Chief Financial Officer of IMC. “Partially offsetting these declines, we were able to reduce our operating costs in the fourth quarter of 2023 by 55% as compared to the fourth quarter of 2022, ending the year with a 43% reduction in our operating costs as compared to last year, as we leaned further into our goal of active cost management.”

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.

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 2023 MD&A.

We reconcile these non-IFRS financial measures to the most comparable IFRS measures as set out below:

About IM Cannabis Corp.

IM Cannabis Corp. (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 its commercial relationship with 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. Until recently, the Company also actively operated in Canada through Trichome Financial Corp and its wholly owned subsidiaries, where it cultivated, processed, packaged, and sold premium and ultra-premium cannabis at its own facilities under the WAGNERS and Highland Grow brands for the adult-use market in Canada. 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 Company leaving the Canadian cannabis market to pivot its focus and resources to achieve sustainable and profitable growth in its highest value markets, Israel and Germany; 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 partial legalization of medicinal cannabis in Germany, including, the Company having it “all in house”, the Company being positioned to take advantage of the partial legalization, the Company’s growth in 2024, the market growth for medicinal cannabis in Germany, and 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 partial 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 Focus Medical (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 partial 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.

1 Earnings before interest, taxes, depreciation, and amortization (“EBITDA“) and Adjusted EBITDA. These measures do not have a standardized meaning prescribed by International Financial Reporting Standards (“IFRS“) and are therefore unlikely to be comparable to similar measures presented by other issuers. Non-IFRS measures provide investors with a supplemental measure of the Company’s operating performance and therefore highlight trends in Company’s core business that may not otherwise be apparent when relying solely on IFRS measures. Management uses non-IFRS measures in measuring the financial performance of the Company.

2 Based on reporting by Insight Health’s as of December 31, 2023.

 

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
[email protected]

 

 

 

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Canadian Dollars in thousands

December 31,

Note

2023

2022

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$    1,813

$        2,449

Trade receivables

6

7,651

8,684

Advances to suppliers

936

1,631

Other accounts receivable

7

3,889

3,323

Inventory

9

9,976

16,585

24,265

32,672

NON-CURRENT ASSETS:

Property, plant and equipment, net

10

5,058

5,221

Investments in affiliates

15c

2,285

2,410

Right-of-use assets, net

12

1,307

1,929

Deferred tax assets, net

17

763

Intangible assets, net

11

5,803

7,910

Goodwill

11

10,095

9,771

24,548

28,004

Total assets

$       48,813

$       60,676

The accompanying notes are an integral part of the consolidated financial statements.

 

 

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Canadian Dollars in thousands

December 31,

Note

2023

2022

LIABILITIES AND EQUITY

CURRENT LIABILITIES:

Trade payables

14

$        9,223

$       15,312

Credit from banks and others

13

12,119

9,246

Other accounts payable and accrued expenses

15

6,218

6,013

Accrued purchase consideration liabilities

5

2,097

2,434

PUT Option liability

2,697

Current maturities of operating lease liabilities

12

454

814

32,808

33,819

NON-CURRENT LIABILITIES:

Warrants measured at fair value

17

38

8

Operating lease liabilities

12

815

1,075

Credit from banks and others

394

399

Employee benefit liabilities, net

16

95

246

Deferred tax liability, net

19

963

1,332

2,305

3,060

Total liabilities

35,113

36,879

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY:

20

Share capital and premium

253,882

245,776

Translation reserve

95

1,283

Reserve from share-based payment transactions

9,637

15,167

Accumulated deficit

(249,145)

(239,574)

Total equity attributable to shareholders of the Company

14,469

22,652

Non-controlling interests

(769)

1,145

Total equity

13,700

23,797

Total equity and liabilities

$       48,813

$       60,676

The accompanying notes are an integral part of the consolidated financial statements.

 

 

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME

Canadian Dollars in thousands

Year ended December 31,

Note

2023

2022

 *) 2021

Revenues

21

$       48,804

$       54,335

$       34,053

Cost of revenues

21

37,974

43,044

25,458

Gross profit before fair value adjustments

10,830

11,291

8,595

Fair value adjustments:

Unrealized change in fair value of biological assets

(315)

6,308

Realized fair value adjustments on inventory sold in the year

(984)

(1,814)

(8,570)

Total fair value adjustments

(984)

(2,129)

(2,262)

Gross profit after fair value adjustments

9,846

9,162

6,333

General and administrative expenses

21

11,008

21,460

17,221

Selling and marketing expenses

21

10,788

11,473

6,725

Restructuring expenses

1

617

4,383

Share-based compensation

20

225

2,637

5,422

Total operating expenses

22,638

39,953

29,368

Operating loss

(12,792)

(30,791)

(23,035)

Finance income

7,006

6,703

23,544

Finance expenses

(3,671)

(1,972)

(673)

Finance income (expense), net

3,335

4,731

22,871

Loss before income taxes

(9,457)

(26,060)

(164)

Income tax expense (benefit)

18

771

(1,138)

500

Net loss from continuing operations

(10,228)

(24,922)

(664)

Net loss from discontinued operations, net of tax

25

(166,379)

(17,854)

Net loss

(10,228)

(191,301)

(18,518)

*)       Reclassified in respect of discontinued operations – see Note 25.

The accompanying notes are an integral part of the consolidated financial statements.

 

 

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME

Canadian Dollars in thousands, except per share data

Year ended December 31,

Note

2023

2022

 *) 2021

Other comprehensive income that will not be reclassified to profit or loss in subsequent periods:

Remeasurement gain on defined benefit plans

38

59

21

Exchange differences on translation to presentation currency

(894)

(1,238)

858

Total other comprehensive income that will not be reclassified to profit or loss in subsequent periods

(856)

(1,179)

879

Other comprehensive income that will be reclassified to profit or loss in subsequent periods:

Adjustments arising from translating financial statements of foreign operation

231

(246)

530

Total other comprehensive income (loss)

(625)

(1,425)

1,409

Total comprehensive loss

$     (10,853)

$    (192,726)

$      (17,109)

Net loss attributable to:

Equity holders of the Company

$      (9,498)

$    (188,890)

$      (17,763)

Non-controlling interests

(730)

(2,411)

(755)

$       (10,228)

$    (191,301)

$      (18,518)

Total comprehensive loss attributable to:

Equity holders of the Company 

$        (10,648)

$    (190,162)

$      (16,357)

Non-controlling interests 

$        (205)

(2,564)

(752)

$        (10,853)

$    (192,726)

$     (17,109)

Earnings (loss) per share attributable to equity holders of the Company from continuing operations:

22

Basic earnings (loss) per share (in CAD)

$              (0.74)

$          (3.13)

$            0.02

Diluted loss per share (in CAD)

$              (0.74)

$          (3.81)

$           (3.62)

Loss per share attributable to equity holders of the Company from discontinued operations:

Basic and diluted loss per share (in CAD)

$        (23.17)

$          (3.08)

Loss per share attributable to equity holders of the Company from net loss:

Basic earnings (loss) per share (in CAD)

$              (0.74)

$        (26.3)

$          (3.06)

Diluted loss per share (in CAD)

$              (0.74)

$        (26.98)

$          (6.7)

*)       Reclassified in respect of discontinued operations – see Note 25.

The accompanying notes are an integral part of the consolidated financial statements.

 

 

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Canadian Dollars in thousands

Share capital and premium

Treasury Stock

Reserve from share-based payment transactions

Translation reserve

Accumulated deficit

Total

Non-controlling interests

Total
equity

Balance as of January 1, 2021

$     37,040

$              –

$       5,829

$       1,229

$   (33,001)

$     11,097

$       1,513

$     12,610

Net loss

(17,763)

(17,763)

(755)

(18,518)

Total other comprehensive income

1,385

21

1,406

3

1,409

Total comprehensive income (loss)

1,385

(17,742)

(16,357)

(752)

(17,109)

Issuance of common shares, net of issuance costs of $3,800

195,259

195,259

2,948

198,207

Purchase of treasury common shares

(660)

(660)

(660)

Exercise of warrants and compensation options

4,293

4,293

4,293

Exercise of options

1,053

(920)

133

133

Share-based compensation

7,471

7,471

7,471

Expired options

32

(32)

Balance as of December 31, 2021

237,677

(660)

12,348

2,614

(50,743)

201,236

3,709

204,945

Net loss

(188,890)

(188,890)

(2,411)

(191,301)

Total other comprehensive income (loss)

(1,331)

59

(1,272)

(153)

(1,425)

Total comprehensive loss

(1,331)

(188,831)

(190,162)

(2,564)

(192,726)

Issuance of treasury common shares

660

660

660

Issuance of shares, net of issuance costs of $178

6,818

6,818

6,818

Exercise of options

992

(659)

333

333

Share-based compensation

3,767

3,767

3,767

Expired options

289

(289)

Balance as of December 31, 2022

245,776

15,167

1,283

(239,574)

22,652

1,145

23,797

The accompanying notes are an integral part of the consolidated financial statements.

 

 

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Canadian Dollars in thousands

Share capital
and
premium*)

Reserve from
share-based
payment
transactions

Translation
reserve

Accumulated
deficit

Total

Non-controlling interests

Total
equity

Balance as of December 31, 2022

245,776

15,167

1,283

(239,574)

22,652

1,145

23,797

Net loss

(9,498)

(9,498)

(730)

(10,228)

Total other comprehensive income (loss)

(1,188)

38

(1,150)

525

(625)

Total comprehensive loss

(1,188)

(9,460)

(10,648)

(205)

(10,853)

Issuance of treasury common shares

2,351

2,351

2,351

Issuance of shares, net of issuance costs of $178

Exercise of options

Other comprehensive income Classification

(111)

(111)

(1,709)

(1,820)

Share-based compensation

225

225

225

Expired options

5,755

(5,755)

Balance as of December 31, 2023

253,882

9,637

95

(249,145)

14,469

(769)

13,700

The accompanying notes are an integral part of the consolidated financial statements.

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

Canadian Dollars in thousands

Year ended December 31,

2023

2022

2021

Cash provided from operating activities:

Net loss

$     (10,228)

$ (191,301)

$   (18,518)

Adjustments for non-cash items:

Unrealized gain on changes in fair value of biological assets

(84)

(7,210)

Fair value adjustment on sale of inventory

984

4,342

8,796

Fair value adjustment on warrants, investments, and accounts receivable

(6,955)

(6,000)

(21,638)

Depreciation of property, plant and equipment

644

3,044

3,021

Amortization of intangible assets

1,758

2,343

1,158

Depreciation of right-of-use assets

594

1,944

1,550

Impairment of goodwill

107,854

275

Impairment of property, plant and equipment

2,277

Impairment of intangible assets

7,199

Impairment of right-of-use assets

1,914

Finance income, net

3,019

6,532

1,262

Deferred tax payments (benefit), net

394

(3,004)

278

Share-based payments

225

3,767

7,471

Share based acquisition costs related to business combination

807

Revaluation of other accounts receivable

3,982

Restructuring expenses

8,757

Loss from revaluation of investments

601

1,264

144,867

(4,230)

Changes in non-cash working capital:

Increase (decrease) in trade receivables, net

2,320

6,058

(6,602)

Increase (decrease) in other accounts receivable and advances to suppliers

1,299

3,622

845

Decrease in biological assets, net of fair value adjustments

565

6,412

Increase (decrease) in inventory, net of fair value adjustments

4,771

883

(19,707)

Increase (decrease) in trade payables

(6,098)

11,284

5,573

Changes in employee benefit liabilities, net

(139)

(63)

28

Increase in other accounts payable and accrued expenses

(750)

12,126

2,661

1,403

34,475

(10,790)

Taxes paid

(514)

(681)

(834)

Net cash used in operating activities

(8,075)

(12,640)

(34,372)

The accompanying notes are an integral part of the consolidated financial statements.

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

Canadian Dollars in thousands

Year ended December 31,

2023

2022

2021

Cash flows from investing activities:

Purchase of property, plant and equipment

(581)

(1,562)

(4,578)

Proceeds from sales of property, plant and equipment

210

Proceeds from loans receivable

350

7,796

Purchase of intangible assets

(17)

Acquisition of businesses, net of cash acquired

(12,536)

Deconsolidation of subsidiary (see Note 25)

(406)

Investments in financial assets

(13)

Proceeds from sale of investment

319

Proceeds from (investment in) restricted deposits

17

Investments in associates

(601)

(125)

Net cash used in investing activities

(1,182)

(1,533)

(9,012)

Cash provided by financing activities:

Proceeds from issuance of share capital, net of issuance costs

1,688

3,756

28,131

Proceeds from issuance of warrants measured at fair value

6,585

11,222

Proceeds from exercise of warrants

3,682

Proceeds from exercise of options

333

133

Repayment of lease liability

(586)

(1,656)

(633)

Payment of lease liability interest

(63)

(1,429)

(1,347)

Proceeds from loans

5,482

9,636

7,804

Repayment of loans

(4,827)

(4,976)

Interest paid

(1,664)

(902)

(261)

Proceeds from discounted checks

2,802

Net cash provided by financing activities

9,417

4,762

48,731

Effect of foreign exchange on cash and cash equivalents

(796)

(2,043)

(329)

Increase (decrease) in cash and cash equivalents

(636)

(11,454)

5,018

Cash and cash equivalents at beginning of year

2,449

13,903

8,885

Cash and cash equivalents at end of year

$      1,813

$      2,449

$    13,903

Supplemental disclosure of non-cash activities:

Right-of-use asset recognized with corresponding lease liability

$         309

$         613

$      1,678

Conversion of warrant and compensation options into common shares

$                 –

$             –

$         611

Issuance of shares in payment of purchase consideration liability

$                 –

$      3,061

$             –

Issuance of shares in payment of debt settlement to a non-independent director of the company

$      1,061

$             –

$             –

 

 

Logo – https://mma.prnewswire.com/media/1742228/IM_Cannabis_Logo.jpg

Cision View original content:https://www.prnewswire.co.uk/news-releases/im-cannabis-reports-2023-financial-results-302102584.html

Continue Reading

Cannabis

Hemp, Inc. Announces Significant Progress in Hemp Seed Meal Approval for Laying Hen Diets

Published

on

Continue Reading

Cannabis

Endexx Corporation (EDXC) Leverages Global Market Trends and Legislative Reforms to Spearhead Growth in the Cannabis and Plant-Based Wellness Sectors

Published

on

Continue Reading

Trending on Grassnews

GrassNews.net: Your premier portal for the latest developments in the cannabis industry. We provide timely news, insightful analysis, and in-depth features on everything from legislation changes and business trends, to scientific research and lifestyle topics. Stay informed and navigate the rapidly evolving cannabis landscape with GrassNews.net..

Contact us: [email protected]

Editorial / PR Submissions

Copyright © 2007 - 2024 Hipther Agency. Registered in Romania under Proshirt SRL, Company number: 2134306, EU VAT ID: RO21343605. Office address: Blvd. 1 Decembrie 1918 nr.5, Targu Mures, Romania