Cannabis
Vext Announces Financial Results for Q1 2023
- Revenue of $9.1 million, Adjusted EBITDA of $2.9 million, Adjusted EBITDA Margin of 32%.
- Generated positive EBITDA of $1.6 million.
- Expanded retail footprint through the acquisition of Jackson, Ohio dispensary and reported solid performance during first quarter under Vext ownership.
- Previously announced acquisition of vertically integrated Ohio operations on track to close towards the end of Q3 2023 and expected to bring continued growth for Vext in 2023.
Vancouver, British Columbia–(Newsfile Corp. – May 25, 2023) – Vext Science, Inc. (CSE: VEXT) (OTCQX: VEXTF) (“VEXT” or the “Company”) a U.S.-based cannabis operator with vertical operations in Arizona and Ohio1, today reported its financial results for the period ended March 31, 2023. All currency references used in this news release are in U.S. currency unless otherwise noted.
Summary Financial Results
Q1 2023 | Q4 2022 | Q1 2022 | |
Revenue | $9,110,651 | $8,180,603 | $10,791,133 |
Gross margin before impact of biological assets (%) 2 | 51% | 50% | 60.6% |
Adjusted Gross Margin (%) 2, 3 | 51% | 50% | 53% |
EBITDA 2 | $1,638,009 | $2,479,885 | $5,610,739 |
Adjusted EBITDA 2 | $2,930,919 | $3,180,835 | $3,811,589 |
Adjusted EBITDA margin (%) 2 | 32% | 39% | 35% |
Management Commentary
Eric Offenberger, CEO of Vext, commented, “The first quarter of 2023 marked a solid start to the year for Vext in the context of a challenging environment across the board for consumer-facing businesses. In Arizona, the state reported a ~15% decrease in overall sales in the first two months of the year, as compared to the same period in 2022. Despite these challenges, our operated dispensaries outperformed the overall state average. Our team has been successful at driving higher traffic and maintaining a recurring customer base, to help compensate for lower average basket sizes, as consumers continue to watch their discretionary spending. Vext’s vertically integrated operations, where we only cultivate flower that we can sell through our own retail footprint, our focus on efficient retail operations and our proven track record of driving efficiencies set the Company up well both through this period, as well as for growth as the economic backdrop improves.”
“For the remainder of the year, we will continue to focus on strengthening our presence in Arizona and preparations to close the acquisition of vertical operations in Ohio1, which we see as the next major growth opportunity for Vext, given its limited license structure and potential for future adult-use transition. Our strong balance sheet and proven experience as a profitable operator positions us well to continue to gain market share across our footprint, while building value for shareholders,” added Mr. Offenberger.
Q1 2023 Financial Results Conference Call
Vext will host a conference call and webcast on Thursday, May 25, 2023 at 8:00 a.m. ET to discuss its first quarter financial results.
Date: May 25, 2023 | Time: 8:00am ET
Participant Dial-in: 416-915-3239 or 1-800-319-4610
Replay Dial-in: 1-800-319-6413
Conference ID: 10021826
Playback #: 0139 (Expires on June 8, 2023)
Listen to webcast: https://www.gowebcasting.com/12550
For more details, visit Vext’s investor website or contact the IR team at [email protected].
Non-IFRS Financial Measure
The Company has provided certain non-IFRS financial measures including “Gross margin”, “Adjusted Gross Margin”, “EBITDA”, “Adjusted EBITDA” and “Adjusted EBITDA margin”. These non-IFRS financial measures do not have a standardized definition under IFRS, nor are they calculated or presented in accordance with IFRS and may not be comparable to similar measures presented by other companies. The Company defines “Gross margin” as Gross Profit divided by Revenue and “Adjusted Gross Margin” as Gross margin before the impact of biological assets, as adjusted for one-time inventory fair value adjustment, divided by Revenue. The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization. The Company defines “Adjusted EBITDA” as net income (loss) from operations, as reported, before interest and tax, adjusted to exclude extraordinary items, non-recurring items, other non-cash items, including stock-based compensation expense, depreciation and amortization, foreign exchange and acquisition related costs, if applicable. The Company defines “Adjusted EBITDA margin” as Adjusted EBITDA divided by Revenue.
The Company has provided these non-IFRS financial measures as supplemental information and in addition to the financial measures that are calculated and presented in accordance with IFRS. The Company believes that these supplemental non-IFRS financial measures provide a valuable additional measure to use when analyzing the operating performance of the business. These supplemental non-IFRS financial measures should not be considered superior to, as a substitute for or as an alternative to, and should only be considered in conjunction with, the IFRS financial measures presented herein.
The following information provides reconciliations of the supplemental non-IFRS financial measure presented herein to the most directly comparable financial measure calculated and presented in accordance with IFRS.
Gross Margin Before Impact of Biological Assets and Adjusted Gross Margin
Gross Margin Before Impact of Biological Assets is defined as: Gross Profit Before Impact of Biological Assets, divided by Revenue.
Adjusted Gross Margin is defined as: Gross Margin Before Impact of Biological Assets, adjusted for one-time inventory fair value adjustment, divided by Revenue.
Q1 2023 | |
Revenue | $9,110,651 |
Gross Profit | $4,701,716 |
Change in Fair Value of Biological Assets | ($59,623) |
Gross Profit Before Impact of Biological Assets | $4,642,093 |
Relative fair value adjustment to inventory | – |
Adjusted Gross Profit | $4,642,093 |
Adjusted Gross Margin | 51% |
Adjusted EBITDA
Q1 2023 | Q4 2022 | Q1 2022 | |
Net Income after taxes | $73,059 | $6,282,582 | $2,260,957 |
Interest (Net) | $860,978 | $632,207 | $337,888 |
Income Taxes | ($1,141,064) | ($6,209,576) | $1,475,051 |
Depreciation & Amortization | $1,845,036 | $1,774,672 | $1,536,843 |
EBITDA | $1,638,009 | $2,479,885 | $5,610,739 |
Accretion | ($6,026) | $ – | $12,372 |
Share (Profit) / Loss on JVs | $91,205 | $40,256 | $182,145 |
Share-based compensation | $130,332 | $601,493 | $85,696 |
(Gain)/Loss on Asset Disposal | $ – | ($13,127) | $ – |
Gain on derecognition of ROU | $ – | $ – | $ – |
(Gain)/Loss on Investment | $ – | $ – | $ – |
Loan modification non-convertible debentures | $ – | $200,170 | $ – |
Loan Costs WPCU Loan | $742,036 | $ – | $ – |
FV of WPCU Loan | $190,984 | $ – | $ – |
Loan Costs EWB Amortized | $125,451 | $ – | $ – |
Other Income | $ – | $ – | $ – |
RSU Taxes | $75,825 | $119,900 | $ – |
Foreign Exchange | $2,726 | ($350) | ($212) |
Relative FV adjustment to inventory | $ – | $ – | ($863,000) |
Change in FV of Biological | ($59,623) | ($247,392) | ($1,216,152) |
Adjusted EBITDA | $2,930,919 | $3,180,835 | $3,811,589 |
About VEXT Science, Inc.
Vext Science, Inc. is a U.S.-based cannabis operator with vertical operations in Arizona and Ohio1. Vext’s expertise spans from cultivation through to retail operations in its key markets. Based out of Arizona, Vext owns and operates state-of-the-art cultivation facilities, fully built-out manufacturing facilities as well as dispensaries in both Arizona and Ohio1. The Company manufactures Vapen™, one of the leading THC concentrates, edibles, and distillate cartridge brands in Arizona. Its selection of award-winning products are created with Vext’s in-house, high-quality flower and distributed across Arizona and Ohio, as well as through Vext’s partnerships in other states. Vext’s leadership team brings a proven track record of building and operating profitable multi-state operations, with the Company having operated profitably since 2016. The Company’s primary focus is to continue growing in its core states of Arizona and Ohio, bringing together cutting-edge science, manufacturing, and marketing to provide a reliable and valuable customer experience while generating shareholder value.
Vext Science is listed on the Canadian Securities Exchange under the symbol VEXT and trades on the OTCQX market under the symbol VEXTF. Learn more at www.vextscience.com and connect with Vext on Twitter and LinkedIn.
For more details on the Vapen brand:
Vapen website: VapenBrands.com
Instagram: @vapen
Facebook: @vapenbrands
Forward Looking Statements
This news release contains “forward-looking statements”. Wherever possible, words such as “may”, “would”, “could”, “should”, “will”, “anticipate”, “believe”, “plan”, “expect”, “intend”, “estimate”, “potential for”, “see” and similar expressions have been used to identify these forward-looking statements. These forward-looking statements reflect the current expectations of the Company’s management for future growth, results of operations, performance and business prospects and opportunities and involve significant known and unknown risks, uncertainties and assumptions, including, without limitation: the Company’s outlook for and expected operating margins, capital allocation and other financial results; statements relating to the business and future activities of, and developments related thereto, the Company after the date of this news release, including such things as future business strategy, competitive strengths, goals, expansion and growth of the Company’s business, operations and plans; expectations regarding cultivation and manufacturing capacity; expectations of market size and growth in the U.S. and the states in which the Company operates; inflation pressures; the timeline to buildout the Eloy cultivation facility; expectations for other economic business or competitive factors related to the Company; the Company’s business outlook, those listed in the Company’s filings with the Canadian securities regulatory authorities (which may be viewed at www.sedar.com). Should one or more of these risks or uncertainties materialize or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by the forward-looking statements contained in this news release. These factors should be considered carefully, and prospective investors should not place undue reliance on the forward-looking statements. The Company disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments or otherwise, except as required by law.
The Canadian Securities Exchange has not reviewed, approved or disapproved the content of this news release.
Eric Offenberger
Chief Executive Officer
844-211-3725
For further information:
Jonathan Ross, Vext Investor Relations
[email protected]
416-244-9851
SOURCE: VEXT Science, Inc.
1 Vext has entered into a definitive agreement to acquire Appalachian Pharm Processing, LLC, an Ohio limited liability company, together with its subsidiaries and affiliated companies. Subject to regulatory approval, this proposed acquisition (the “Ohio Acquisition”) is expected to close by the end of the third quarter of 2023.
2 See “Non-IFRS Financial Measures” below for more information regarding Vext’s use of non-IFRS financial measures and other reconciliations.
3 Adjusted Gross Margin is adjusted for the one-time fair value adjustments to inventory in Q1 & Q2 2022 that were made as a result of Vext’s transition to a for-profit operating and accounting model. The Company does not expect to report Adjusted Gross Margin on an ongoing basis after Q2 2023.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/167392
Cannabis
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 |
|||||||||
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 |
Reserve from |
Translation |
Accumulated |
Total |
Non-controlling interests |
Total |
||||||||
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 |
$ – |
$ – |
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