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Salem Media Group, Inc. Announces First Quarter 2019 Total Revenue of $60.5 Million

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CAMARILLO, Calif.–(BUSINESS WIRE)–Salem Media Group, Inc. (Nasdaq: SALM) released its results for the
three months ended March 31, 2019.

First Quarter 2019 Results

For the quarter ended March 31, 2019 compared to the quarter ended March
31, 2018:

Consolidated

  • Total revenue decreased 5.2% to $60.5 million from $63.8 million;
  • Total operating expenses increased 5.7% to $61.5 million from $58.1
    million;
  • Operating expenses, excluding gains or losses on the disposition of
    assets, stock-based compensation expense, depreciation expense and
    amortization expense (1) decreased 1.0% to $53.0 million from $53.6
    million;
  • Operating income decreased to a $1.0 million operating loss from $5.7
    million operating income;
  • Net income decreased 61.1% to $0.3 million, or $0.01 net income per
    diluted share from $0.8 million, or $0.03 net income per diluted share;
  • EBITDA (1) decreased 64.1% to $3.7 million from $10.2 million;
  • Adjusted EBITDA (1) decreased 25.4% to $7.6 million from $10.2
    million; and
  • Net cash provided by operating activities decreased 30.3% to $9.0
    million from $12.9 million.

Broadcast

  • Net broadcast revenue decreased 4.1% to $46.1 million from $48.1
    million;
  • Station Operating Income (“SOI”) (1) decreased 21.6% to $9.6 million
    from $12.3 million;
  • Same Station (1) net broadcast revenue decreased 2.9% to $45.5 million
    from $46.8 million; and
  • Same Station SOI (1) decreased 22.7% to $9.9 million from $12.8
    million.

Digital Media

  • Digital media revenue decreased 1.5% to $10.2 million from $10.4
    million; and
  • Digital Media Operating Income (1) increased 8.0% to $2.2 million from
    $2.0 million.

Publishing

  • Publishing revenue decreased 22.7% to $4.1 million from $5.4 million;
    and
  • Publishing Operating Loss (1) increased to $0.7 million from $0.2
    million.

Included in the results for the quarter ended March 31, 2019 are:

  • A $4.0 million ($2.4 million, net of tax, or $0.09 per share) net loss
    on the disposition of assets including a $3.8 million estimated
    pre-tax loss for the sale of WSPZ-AM in Washington, D.C., a $0.2
    million pre-tax loss on the sale of Mike Turner’s line of investment
    products and a $0.2 million pre-tax loss on the sale of
    HumanEvents.com offset by a $0.1 million pre-tax gain on the sale of
    Newport Natural Health;
  • A $0.4 million gain ($0.3 million, net of tax, or $0.01 per diluted
    share) on early redemption of long-term debt due to the repurchase of
    the company’s 6.75% senior secured notes due 2024;
  • A $0.2 million one-time expense associated with the adoption of ASC
    842 ($0.1 million, net of tax) and
  • A $176,000 non-cash compensation charge ($106,000, net of tax) related
    to the expensing of stock options and restricted stock consisting of:

    • $107,000 non-cash compensation charge included in corporate
      expenses;
    • $39,000 non-cash compensation charge included in broadcast
      operating expenses;
    • $26,000 non-cash compensation charge included in digital media
      operating expenses; and
    • the remaining $4,000 non-cash compensation charge included in
      publishing operating expenses.

Included in the results for the quarter ended March 31, 2018 are:

  • A $46,000 non-cash compensation charge ($28,000, net of tax) related
    to the expensing of stock options and restricted stock consisting of:

    • $24,000 non-cash compensation charge included in corporate
      expenses;
    • $13,000 non-cash compensation charge included in broadcast
      operating expenses;
    • $5,000 non-cash compensation charge included in digital media
      operating expenses; and
    • the remaining $4,000 non-cash compensation charge included in
      publishing operating expenses.

Per share numbers are calculated based on 26,193,307 diluted weighted
average shares for the quarter ended March 31, 2019, and 26,304,891
diluted weighted average shares for the quarter ended March 31, 2018.

Balance Sheet

As of March 31, 2019, the company had $231.9 million outstanding on the
6.75% senior secured notes due 2024 and $16.0 million outstanding under
the Asset Based Revolving Credit Facility (“ABL Facility”) as of March
31, 2019.

Acquisitions and Divestitures

The following transactions were completed since January 1, 2019:

  • On March 21, 2019, the company sold Newport Natural Health, an
    e-commerce website operated by Eagle Wellness for $0.9 million in
    cash. The company recognized a pre-tax gain of $0.1 million associated
    with the sale reflecting the sales price as compared to the carrying
    value of the assets and the closing costs.
  • On March 18, 2019, the company acquired the pjmedia.com website for
    $0.1 million in cash.
  • On February 28, 2019, the company sold Mike Turner’s line of
    investment products, including TurnerTrends.com and other domain names
    and related assets. The company received no cash from the buyer who
    assumed all deferred subscription liabilities for Mike Turner’s
    investment products. The company recognized a pre-tax loss of
    approximately $0.2 million associated with the sale reflecting the
    sales price as compared to the carrying value of the assets and the
    closing costs.
  • On February 27, 2019, the company sold HumanEvents.com, a conservative
    opinion website, for $0.3 million in cash. The company recognized a
    pre-tax loss of approximately $0.2 million associated with the sale
    reflecting the sales price as compared to the carrying value of the
    assets and the closing costs.

Pending transactions:

  • On April 29, 2019 the company entered into an agreement to exchange FM
    Translator W276CR, in Bradenton, Florida with FM Translator W262CP in
    Bayonet Point, Florida. No cash will be exchanged for the assets.
  • On March 19, 2019, the company entered into an agreement to sell radio
    station WSPZ-AM (previously WWRC-AM) in Washington D.C. for $0.8
    million. The company recorded an estimated pre-tax loss of assets of
    $3.8 million as of March 31, 2019, which reflected the sales price as
    compared to the carrying value of the assets and the estimated costs
    of the sale. The sale is expected to close in the second quarter of
    2019. On April 3, 2019, the company entered into a Time Brokerage
    Agreement (“TBA”) effective April 12, 2019, under which radio station
    WSPZ-AM, is operated by the buyer pending the sale of the station.
  • In December 2018, Word Broadcasting notified the company of their
    intent to purchase its Louisville radio stations. They began operating
    the stations under a Time Brokerage Agreement beginning on January 3,
    2017 that will continue until the purchase agreement is executed and
    the transaction closes.
  • On April 26, 2018, the company entered an agreement to exchange radio
    station KKOL-AM, in Seattle, Washington for KPAM-AM in Portland,
    Oregon. The transaction is expected to close in the first half of 2019.

Conference Call Information

Salem will host a teleconference to discuss its results on May 10, 2019
at 12:00 p.m. Pacific Time. To access the teleconference, please dial
(877) 524-8416, and then ask to be joined into the Salem Media Group
First Quarter 2019 call or listen via the investor relations portion of
the company’s website, located at investor.salemmedia.com.
A replay of the teleconference will be available through May 24, 2019
and can be heard by dialing (877) 660-6853, passcode 13688917 or on the
investor relations portion of the company’s website, located at investor.salemmedia.com.

Second Quarter 2019 Outlook

For the second quarter of 2019, the company is projecting total revenue
to be between a decrease of 1% and an increase of 1% from second quarter
2018 total revenue of $66.3 million. Excluding the impact of political
revenue and recent acquisitions and dispositions, the company is
projecting total revenue to increase between 1% and 3%. The company is
also projecting operating expenses before gains or losses on the
disposition of assets, stock-based compensation expense, changes in the
estimated fair value of contingent earn-out consideration, impairments,
depreciation expense and amortization expense to be between flat and an
increase of 3% compared to the second quarter of 2018 non-GAAP operating
expenses of $55.1 million.

A reconciliation of non-GAAP operating expenses, excluding gains or
losses on the disposition of assets, stock-based compensation expense,
changes in the estimated fair value of contingent earn-out
consideration, impairments, depreciation expense and amortization
expense to the most directly comparable GAAP measure is not available
without unreasonable efforts on a forward-looking basis due to the
potential high variability, complexity and low visibility with respect
to the charges excluded from this non-GAAP financial measure, in
particular, the change in the estimated fair value of earn-out
consideration, impairments and gains or losses from the sale or disposal
of fixed assets. The company expects the variability of the above
charges may have a significant, and potentially unpredictable, impact on
its future GAAP financial results.

About Salem Media Group, Inc.

Salem Media Group is America’s leading multimedia company specializing
in Christian and conservative content, with media properties comprising
radio, digital media and book and newsletter publishing. Each day Salem
serves a loyal and dedicated audience of listeners and readers numbering
in the millions nationally. With its unique programming focus, Salem
provides compelling content, fresh commentary and relevant information
from some of the most respected figures across the Christian and
conservative media landscape. Learn more about Salem Media Group, Inc.,
at www.salemmediagroup.com,
Facebook and Twitter (@SalemMediaGrp).

Forward-Looking Statements

Statements used in this press release that relate to future plans,
events, financial results, prospects or performance are forward-looking
statements as defined under the Private Securities Litigation Reform Act
of 1995. Actual results may differ materially from those anticipated as
a result of certain risks and uncertainties, including but not limited
to the ability of Salem to close and integrate announced transactions,
market acceptance of Salem’s radio station formats, competition from new
technologies, adverse economic conditions, and other risks and
uncertainties detailed from time to time in Salem’s reports on Forms
10-K, 10-Q, 8-K and other filings filed with or furnished to the
Securities and Exchange Commission. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as
of the date hereof. Salem undertakes no obligation to update or revise
any forward-looking statements to reflect new information, changed
circumstances or unanticipated events.

(1) Regulation G

Management uses certain non-GAAP financial measures defined below in
communications with investors, analysts, rating agencies, banks and
others to assist such parties in understanding the impact of various
items on its financial statements.
The company uses these
non-GAAP financial measures to evaluate financial results, develop
budgets, manage expenditures and as a measure of performance under
compensation programs.

The company’s presentation of these non-GAAP financial measures
should not be considered as a substitute for or superior to the most
directly comparable financial measures as reported in accordance with
GAAP.

Regulation G defines and prescribes the conditions under which
certain non-GAAP financial information may be presented in this earnings
release.
The company closely monitors EBITDA, Adjusted EBITDA,
Station Operating Income (“SOI”), Same Station net broadcast revenue,
Same Station broadcast operating expenses, Same Station Operating
Income, Digital Media Operating Income, Publishing Operating Income
(Loss), and operating expenses excluding gains or losses on the
disposition of assets, stock-based compensation, changes in the
estimated fair value of contingent earn-out consideration, impairments,
depreciation and amortization, all of which are non-GAAP financial
measures.
The company believes that these non-GAAP financial
measures provide useful information about its core operating results,
and thus, are appropriate to enhance the overall understanding of its
financial performance.
These non-GAAP financial measures are
intended to provide management and investors a more complete
understanding of its underlying operational results, trends and
performance.

The company defines Station Operating Income (“SOI”) as net broadcast
revenue minus broadcast operating expenses. The company defines Digital
Media Operating Income as net Digital Media Revenue minus Digital Media
Operating Expenses.
The company defines Publishing Operating
Income (Loss) as net Publishing Revenue minus Publishing Operating
Expenses.
The company defines EBITDA as net income before
interest, taxes, depreciation, and amortization.
The company
defines Adjusted EBITDA as EBITDA before gains or losses on the
disposition of assets, before changes in the estimated fair value of
contingent earn-out consideration, before changes in the fair value of
interest rate swap, before impairments, before net miscellaneous income
and expenses, before gain on bargain purchase, before (gain) loss on
early retirement of long-term debt and before non-cash compensation
expense.
SOI, Digital Media Operating Income, Publishing
Operating Loss, EBITDA and Adjusted EBITDA are commonly used by the
broadcast and media industry as important measures of performance and
are used by investors and analysts who report on the industry to provide
meaningful comparisons between broadcasters.
SOI, Digital Media
Operating Income, Publishing Operating Loss, EBITDA and Adjusted EBITDA
are not measures of liquidity or of performance in accordance with GAAP
and should be viewed as a supplement to and not a substitute for or
superior to its results of operations and financial condition presented
in accordance with GAAP.
The company’s definitions of SOI,
Digital Media Operating Income, Publishing Operating Loss, EBITDA and
Adjusted EBITDA are not necessarily comparable to similarly titled
measures reported by other companies.

The company defines Adjusted Free Cash Flow as Adjusted EBITDA less
cash paid for capital expenditures, less cash paid for income taxes, and
less cash paid for interest.
The company considers Adjusted Free
Cash Flow to be a liquidity measure that provides useful information to
management and investors about the amount of cash generated by its
operations after cash paid for capital expenditures, cash paid for
income taxes and cash paid for interest.
A limitation of Adjusted
Free Cash Flow as a measure of liquidity is that it does not represent
the total increase or decrease in its cash balance for the period.
The
company uses Adjusted Free Cash Flow, a non-GAAP liquidity measure, both
in presenting its results to stockholders and the investment community,
and in its internal evaluation and management of the business.
The
company’s presentation of Adjusted Free Cash Flow is not intended to be
considered in isolation or as a substitute for the financial information
prepared and presented in accordance with GAAP.
The company’s
definition of Adjusted Free Cash Flow is not necessarily comparable to
similarly titled measures reported by other companies.

The company defines Same Station net broadcast revenue as broadcast
revenue from its radio stations and networks that the company owns or
operates in the same format on the first and last day of each quarter,
as well as the corresponding quarter of the prior year.
The
company defines Same Station broadcast operating expenses as broadcast
operating expenses from its radio stations and networks that the company
owns or operates in the same format on the first and last day of each
quarter, as well as the corresponding quarter of the prior year.
The
company defines Same Station SOI as Same Station net broadcast revenue
less Same Station broadcast operating expenses.
Same Station
operating results include those stations that the company owns or
operates in the same format on the first and last day of each quarter,
as well as the corresponding quarter of the prior year.
Same
Station operating results for a full calendar year are calculated as the
sum of the Same Station-results for each of the four quarters of that
year.
The company uses Same Station operating results, a non-GAAP
financial measure, both in presenting its results to stockholders and
the investment community, and in its internal evaluations and management
of the business.
The company believes that Same Station operating
results provide a meaningful comparison of period over period
performance of its core broadcast operations as this measure excludes
the impact of new stations, the impact of stations the company no longer
owns or operates, and the impact of stations operating under a new
programming format.
The company’s presentation of Same Station
operating results are not intended to be considered in isolation or as a
substitute for the financial information prepared and presented in
accordance with GAAP.
The company’s definition of Same Station
operating results is not necessarily comparable to similarly titled
measures reported by other companies.

For all non-GAAP financial measures, investors should consider the
limitations associated with these metrics, including the potential lack
of comparability of these measures from one company to another.

The Supplemental Information tables that follow the condensed
consolidated financial statements provide reconciliations of the
non-GAAP financial measures that the company uses in this earnings
release to the most directly comparable measures calculated in
accordance with GAAP.
The company uses non-GAAP financial
measures to evaluate financial performance, develop budgets, manage
expenditures, and determine employee compensation.
The company’s
presentation of this additional information is not to be considered as a
substitute for or superior to the directly comparable measures as
reported in accordance with GAAP.

 
Salem Media Group, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
     
Three Months Ended
March 31,
2018     2019
(Unaudited)
Net broadcast revenue $ 48,050   $ 46,093
Net digital media revenue 10,394 10,240
Net publishing revenue   5,351   4,136
Total revenue   63,795   60,469
Operating expenses:
Broadcast operating expenses 35,750 36,449
Digital media operating expenses 8,374 8,058
Publishing operating expenses 5,587 4,822
Unallocated corporate expenses 3,921 3,871
Depreciation and amortization 4,487 4,229
Net (gain) loss on the disposition of assets   5   4,024
Total operating expenses   58,124   61,453
Operating income (loss) 5,671 (984)
Other income (expense):
Interest income 2 1
Interest expense (4,518) (4,425)
Gain on early retirement of long-term debt 426
Net miscellaneous income and expenses   75   1
Net income (loss) before income taxes 1,230 (4,981)
Provision for (benefit from) income taxes   402   (5,303)
Net income $ 828 $ 322
 
Basic earnings per share Class A and Class B common stock $ 0.03 $ 0.01
Diluted earnings per share Class A and Class B common stock $ 0.03 $ 0.01
 
Basic weighted average Class A and Class B common stock shares
outstanding
  26,171,539   26,186,112
Diluted weighted average Class A and Class B common stock shares
outstanding
  26,304,891   26,193,307
 
 
Salem Media Group, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
               
  December 31, 2018   March 31, 2019
(Unaudited)
Assets
Cash $ 117 $ 4
Trade accounts receivable, net 33,020 30,405
Other current assets 10,500 9,423
Property and equipment, net 96,344 95,546
Operating and financing lease right-of-use assets 164 63,339
Intangible assets, net 414,646 408,386
Deferred financing costs 381 338
Other assets   3,856   4,826
Total assets $ 559,028 $ 612,267
 
Liabilities and Stockholders’ Equity
Current liabilities $ 52,878 $ 66,440
Long-term debt 234,030 227,683
Operating and financing lease liabilities, less current portion 105 62,003
Deferred income taxes 35,272 29,968
Other liabilities 14,874 5,508
Stockholders’ Equity   221,869     220,665
Total liabilities and stockholders’ equity $ 559,028   $ 612,267
 
                       

SALEM MEDIA GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Dollars in thousands, except share and per share data)

 
 
Class A Class B
Common Stock Common Stock Additional
        Paid-In Retained Treasury  
Shares Amount Shares Amount Capital Earnings Stock Total

Stockholders’
equity, December
31, 2018

22,950,066 $ 227 5,553,696 $ 56 $ 245,220 $ 10,372 $ (34,006 ) $ 221,869

Stock-based
compensation

176 176
Cash distributions (1,702 ) (1,702 )
Net income             322       322  

Stockholders’
equity, March 31,
2019

  22,950,066 $ 227   5,553,696 $ 56 $ 245,396 $ 8,992   $ (34,006 ) $ 220,665  

Distributions per
share

$ 0.065 $ 0.065
 
 
Class A Class B
Common Stock Common Stock Additional
Paid-In Retained Treasury
Shares Amount Shares Amount Capital Earnings Stock Total

Stockholders’
equity, December
31, 2017

22,932,451 $ 227 5,553,696 $ 56 $ 244,634 $ 20,370 $ (34,006 ) $ 231,281

Stock-based
compensation

46 46
Options exercised 8,125 19 19
Cash distributions (1,701 ) (1,701 )
Net income             828       828  

Stockholders’
equity, March 31,
2018

  22,940,576 $ 227   5,553,696 $ 56 $ 244,699 $ 19,497   $ (34,006 ) $ 230,473  

Distributions per
share

$ 0.065 $ 0.065
 

SALEM MEDIA GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)
(Unaudited)
    Three Months Ended

March 31,

2018       2019  
OPERATING ACTIVITIES
Net income $ 828 $ 322
Adjustments to reconcile net income to net cash provided by
operating activities:
Non-cash stock-based compensation 46 176
Depreciation and amortization 4,487 4,229
Amortization of deferred financing costs 270 258
Non-cash lease expense 2,267
Accretion of acquisition-related deferred payments and contingent
consideration
16 1
Provision for bad debts 146 320
Deferred income taxes 382 (5,304 )
Gain on early retirement of long-term debt (426 )
Net (gain) loss on the disposition of assets 5 4,024
Changes in operating assets and liabilities:
Accounts receivable and unbilled revenue 1,176 1,758
Inventories (78 ) (256 )
Prepaid expenses and other current assets (69 ) 1,387
Accounts payable and accrued expenses 6,629 3,449
Deferred rent expense (119 )
Operating lease liabilities (3,458 )
Contract liabilities (938 ) 133
Deferred rent income (23 ) (43 )
Income taxes payable   115     130  
Net cash provided by operating activities   12,873     8,967  
INVESTING ACTIVITIES
Cash paid for capital expenditures net of tenant improvement
allowances
(2,472 ) (2,404 )
Capital expenditures reimbursable under tenant improvement
allowances and trade agreements
(4 )
Escrow deposits paid related to acquisitions (240 )
Escrow deposits received related to radio station sale 500
Purchases of digital media businesses and assets (100 )
Proceeds from sale of assets 1 1,255
Other   (170 )   (139 )
Net cash used in investing activities   (2,385 )   (1,388 )
FINANCING ACTIVITIES
Payments to repurchase 6.75% Senior Secured Notes (6,123 )
Proceeds from borrowings under ABL Facility 10,334 22,189
Payments on ABL Facility (19,334 ) (25,849 )
Refund (payments) of debt issuance costs 41 (13 )
Proceeds from the exercise of stock options 19
Payments on financing lease liabilities (31 ) (21 )
Payment of cash distribution on common stock (1,701 ) (1,702 )
Book overdraft   187     3,827  
Net cash used in financing activities   (10,485 )   (7,692 )
Net increase (decrease) in cash and cash equivalents 3 (113 )
Cash and cash equivalents at beginning of year   3     117  
Cash and cash equivalents at end of period $ 6   $ 4  
 

Contacts

Evan D. Masyr
Executive Vice President & Chief Financial Officer
(805)
384-4512
[email protected]

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Cannabis

4D Printing in Healthcare Market is Valued at USD 179.7 Million by 2034 with CAGR of 30.7%, Innovating Patient Care with Dynamic Prototyping – By PMI

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Announces

IMC Announces Potential Reverse Merger with Kadimastem a leading Clinical cell therapy company

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imc-announces-potential-reverse-merger-with-kadimastem-a-leading-clinical-cell-therapy-company

Not for distribution to United States newswire services or for dissemination in the United States

TORONTO and GLIL YAM, Israel, Feb. 28, 2024 /PRNewswire/ — IM Cannabis Corp. (CSE: IMCC) (NASDAQ: IMCC) (the “Company” or “IMC“), a leading medical cannabis company with operations in Israel and Germany, is pleased to announce that it has entered into a non-binding term sheet dated February 13, 2024, as amended (the “Term Sheet“), and a Loan Agreement (as defined below) with Holding Company (as defined below), with Israel-based Kadimastem Ltd a clinical cell therapy public company traded on the Tel Aviv Stock Exchange under the symbol (TASE: KDST) (“Kadimastem“), whereby the parties will complete a business combination that will constitute a reverse merger into the Company by Kadimastem (the “Proposed Transaction“).

 

 

We have been looking for a way to deliver maximum value for our shareholders in the current situation and believe that a reverse merger with Kadimastem will provide this,” said Oren Shuster, CEO of IMC. “With its focus on clinical stage cell therapy, and an FDA approval for a Phase IIa clinical trial, we believe that Kadimastem has tremendous potential.”

“Kadimastem’s strategic decision to pursue a NASDAQ listing underscores our commitment to maximizing the potential of our diabetes and ALS product candidates,” said Ronen Twito, Kadimastem’s Executive Chairman of the Board. “This move positions us closer to our target markets in the US, leverages our recent FDA approvals to initiate a Phase IIa multi-site clinical trial in the US for our ALS product candidate and the joint development of a diabetes product with our Florida-based partner, a multi-billion dollar market. We strongly believe this comprehensive strategy will create significant value to the company’s shareholders”.

The Proposed Transaction

The Proposed Transaction will be effected by way of a plan of arrangement involving a newly created wholly-owned subsidiary of IMC and Kadimastem (the “Arrangement“). The resulting issuer that will exist upon completion of the Proposed Transaction (the “Resulting Issuer“) will change its business from medical cannabis to biotechnology and, at the closing of the Proposed Transactions (the “Closing”), Kadimastem  shareholders will hold 88% of the common shares of the Resulting Issuer (the “Resulting Issuer Shares“) and the shareholders of the Company will hold 12% of the Resulting Issuer Share. Parties may agree, in the Definitive Agreement, on a different structure of equity in lieu of the warrants (as described below) with a similar result. The Proposed Transaction is an arm’s length transaction.

Prior to Closing, IMC’s existing medical cannabis operation and other current activities in Israel and Germany (the “Legacy Business“) will be restructured (the “Spin-Out“) as a contingent value right (the “CVR“). The CVR will entitle the holders thereof to receive net cash, equity, or other net value upon the sale of the Legacy Business following the Closing, subject to the terms of the Loan Agreement.

To facilitate the sale of the Legacy Business, a special committee of IMC’s Board of Directors was formed, which will oversee the potential sale in collaboration with legal and financial advisors.

The Legacy Business will be made available for potential sale to a third party for a period of up to 12 months from Closing (the “Record Date“). After the Record Date, any remaining Legacy Business in the CVR will be offered for sale through a tender process, subject to the terms of the best offer. The proceeds from the sale of the Legacy Business will be utilized to settle debts and distribute the remaining balance, if any, to CVR holders.

As a condition of Closing, Kadimastem will have approximately $5 million in gross funds, at Closing including capital raised concurrently with the completion of the Proposed Transaction from existing shareholders and additional investors.

In addition to the foregoing, subject to compliance with applicable law, the Company shall grant shareholders of the Company as of Closing, with warrant(s) equal their pro rata portion, of 2% of the Resulting Issuer’s issued and outstanding common share capital (the “IMC Shares“) prior to the Closing Date (in the aggregate), with an exercise price per share equal to the 10 day volume-weighted average price of the Resulting Issuer’s shares calculated on the NASDAQ Capital Market (“Nasdaq“), ending 2 trading days prior to Closing, the warrants will be for a period of 24 months following Closing.

Description of Kadimastem and its Business

Kadimastem is a clinical stage cell therapy company, Kadimastem’s recently reported receipt of FDA approval for a Phase IIa multi-site clinical trial in the US for the treatment of ALS, and the joint development agreement signed with iTolerance Inc., a Florida based company with a product in the field of diabetes which recently have a successful joint INTERCT meeting with the FDA.

Exchange of Securities

In accordance with the terms of the Proposed Transaction, the holders of the issued and outstanding shares in the capital of Kadimastem (the “Kadimastem Shares“) will be issued such number of IMC Shares in exchange for every one (1) Kadimastem Share held immediately prior to the completion of the Proposed Transaction that reflects the ratio outlined above (the “Exchange Ratio“). Outstanding convertible securities of Kadimastem (the “Kadimastem Convertible Securities“) will be treated through customary mechanics as shall be determined in the definitive agreement, which may include, the assumption of the Kadimastem Convertible Securities by IMC subject to customary adjustments to reflect the Exchange Ratio and exercise price.

Loan Agreement

Pursuant to the terms of the Term Sheet, a loan agreement dated February 28, 2024 (the “Loan Agreement“) was entered between IMC Holdings Ltd. a wholly-owned subsidiary of IMC (the “Holding Company“) and Kadimastem. Pursuant to the Loan Agreement, Kadimastem will provide a loan of up to US$650,000 to the Holding Company, funded in two installments: US$300,000 upon signing the Loan Agreement and US$350,000 upon the execution of the definitive agreement regarding the Proposed Transaction (the “Loan“).

The Loan accrues interest at a rate of 9.00% per annum, compounding annually and is secured by the following collaterals and guarantees: (a) 10% of the proceeds derived from any operation sale under the CVR (“Charged Rights”), limited to the outstanding Loan Amount and expenses according to the Loan Agreement, accordingly Holding Company may, at its sole discretion, to record a second-ranked fixed charge over the Charged Rights or, alternatively, in case the existing pledges over the Charged Rights at the date of signing this Loan Agreement are subsequently discharged or removed, then the Borrower shall promptly record a first-ranking fixed charge over the Charged Assets with all applicable public records; provided that Holding Company shall not impose any new lien, mortgage, charge or pledge over the Charged Rights that did not exist on the date hereof, or any other liens, subject to customary exclusions; (b) the Holding Company shall use its best efforts to record a first-ranking fixed charge over the assets of its subsidiary, A.R Yarok Pharm Ltd, in due course when applicable and as deemed appropriate; and (c) a personal guarantee by Mr. Oren Shuster, IMC’s CEO.

IMC Shareholder Meeting

Prior to the completion of the Proposed Transaction, IMC will call a meeting of its shareholders for the purpose of approving, among other matters:

  • approve the Proposed Transaction;
  • approve the Spin-Out;
  • a change of name of the Company as directed by Kadimastem and acceptable to the applicable regulatory authorities effective upon Closing; and
  • reconstitution of the Company’s board of directors.

Management of the Resulting Issuer

Upon closing of the Proposed Transaction, all of IMC’s current directors and executive officers will resign and the board of directors of the Resulting Issuer will, subject to the approval of governing regulatory bodies, consist of nominees of Kadimastem. All of the executive officers shall be replaced by nominees of Kadimastem, all in a manner that complies with the requirements of governing regulatory bodies and applicable securities and corporate laws.

Details of insiders and proposed directors and officers of the Resulting Issuer will be disclosed in a further news release.

Closing Conditions

The completion of the Proposed Transaction is subject to a number of conditions, including but not limited to the following:

  • the execution of a definitive agreement;
  • completion of mutually satisfactory due diligence;
  • completion of the Share Consolidation; and
  • receipt of all required regulatory, corporate and third party approvals, including approvals by governing regulatory bodies, the shareholders of IMC and Kadimastem, applicable Israeli governmental authorities, and the fulfilment of all applicable regulatory requirements and conditions necessary to complete the Proposed Transaction.

The parties are committed to seeking a successful completion of the Proposed Transaction as soon as practicable, but there can be no absolute certainty that the Proposed Transaction will take place.

Further information

Further details about the Proposed Transaction and the Resulting Issuer will be provided in a comprehensive news release when the parties enter into the definitive agreement.

Investors are cautioned that any information released or received with respect to the Proposed Transaction in this press release may not be complete and should not be relied upon. Trading in the common shares of the Company should be considered highly speculative.

The securities to be issued in connection with the Proposed Transaction have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined in Regulation S promulgated under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Canadian Securities Exchange (“CSE”) and NASDAQ acceptance and if applicable, disinterested shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon

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 recently 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, distribution centers, and logistical hubs in Israel that enable the safe delivery and quality control of IMC’s 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 discontinued.

About Kadimastem Ltd.

Kadimastem is a clinical stage cell therapy company, developing “off-the-shelf”, allogeneic, proprietary cell products based on its technology platform for the expansion and differentiation of Human Embryonic Stem Cells (hESCs) into functional cells. AstroRx®, Kadimastem ‘s lead product, is an astrocyte cell therapy in clinical development for the treatment for ALS and in pre-clinical studies for other neurodegenerative indications.

IsletRx is Kadimastem ‘s treatment for diabetes. IsletRx is comprised of functional pancreatic islet cells producing and releasing insulin and glucagon, intended to treat and potentially cure patients with insulin-dependent diabetes. Kadimastem was founded by Professor Michel Revel, CSO of Kadimastem and Professor Emeritus of Molecular Genetics at the Weizmann Institute of Science. Professor Revel received the Israel Prize for the invention and development of Rebif®, a multiple sclerosis blockbuster drug sold worldwide. Kadimastem is traded on the Tel Aviv Stock Exchange (TASE: KDST).

For more information, please contact:

IM Cannabis Corp.
Anna Taranko, Director Investor & Public Relations
IM Cannabis Corp.
+49 157 80554338
[email protected] 

Oren Shuster, Chief Executive Officer
IM Cannabis Corp.
[email protected] 

Disclaimer for Forward-Looking Statements

This press release contains forward-looking information or forward-looking statements under applicable Canadian and U.S. 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 regarding: the parties’ ability to complete the Proposed Transaction; the expected terms of the Proposed Transaction, the number of securities of the Company that may be issued in connection with the Proposed Transaction, the ownership ratio of the Resulting Issuer post-closing, the Loan and Spin-Out, the ability of the Company and Kadimastem to receive the requisite approvals of all regulatory bodies having jurisdiction in connection with the Proposed Transaction; and the ability of the Resulting Issuer to fulfill the listing requirements of the CSE and Nasdaq;

Forward-looking information in this news release are based on certain assumptions and expected future events, namely: the Company’s ability to continue as a going concern; continued approval of the Company’s activities by the relevant governmental and/or regulatory authorities; the continued growth of the Company; the Company’s ability to finance the completion of the Proposed Transaction; and the ability of the Resulting Issuer to fulfil the listing requirements of the CSE and Nasdaq

These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from those expressed or implied by such statements, including but not limited to: the potential inability of the Company to continue as a going concern; risks associated with potential governmental and/or regulatory action with respect to the Company’s and/or Kadimastem’s operations; the Company’s inability to complete the Proposed Transaction; the inability of the Company and the Target to receive the requisite approvals of all regulatory bodies having jurisdiction in connection with the Proposed Transaction; and the risks associated with the Resulting Issuer’s ability to meet CSE and Nasdaq listing requirements.

Readers are cautioned that the foregoing list is 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: any failure of the Company to maintain “de facto” control over Focus Medical in accordance with IFRS 10; 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 effect of the reform on the Company; the Company’s ability to continue to meet the listing requirements of the CSE and NASDAQ; 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 and war, conflict and civil unrest in Eastern Europe and the Middle East.

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.

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Aurora

Aurora Partners with Script Assist to Provide Better Access to UK Medical Cannabis

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                                                                                                        NASDAQ | TSX: ACB

Partnership will empower UK patients with valuable information and guidance critical to a successful cannabis experience  

EDMONTON, AB, Feb. 28, 2024 /PRNewswire/ — Aurora Cannabis Inc. (NASDAQ: ACB) (TSX: ACB), the Canadian based leading global medical cannabis company, today announced the partnership of Aurora Medicine UK Ltd with Script Assist, a cutting-edge medical cannabis prescription platform in the UK.

Designed to support UK patients on their journey of well-being, the Script Assist platform provides access to high quality medication through their portal. Script Assist will make available an extensive range of medical cannabis products from Aurora’s leading portfolio of products. Starting in March three newly launched, high-quality hang-dried and hand-processed flower products from Aurora’s EU GMP facilities in Canada will also become available on www.scriptassist.co.uk: Pedanios 26/1 EHD-CA (Cultivar: Electric Honey Dew) and Pedanios 28/1 CMK-CA (Cultivar: Chemango Kush) with a high THC content, as well as Pedanios 10/10 EQI-CA (Cultivar: Equiposa) with balanced THC/CBD content.

“Together with our new partner, we are committed to further improve the UK medical cannabis landscape by providing patients with access to premium, high-quality products through Script Assist’s innovative technology solution,” said Trisha Cassidy, Managing Director, Aurora UK & Ireland. “We believe it is necessary and critical to expand not only access to products, but also provide valuable information to guide patients through their medical cannabis journey. We are proud to be a trusted partner for their health,” said Cassidy.

Within the platform, Script Assist is launching ‘Find a Doctor’, an easy-to-use app, which seamlessly connects patients with specialist prescribing doctors. The full range of Aurora’s medical cannabis products will be available for patients through prescription by all private doctors and clinics using the platform, transforming the UK medical cannabis prescription journey.

About Script Assist 

Script Assist revolutionises the medical cannabis prescription process in the UK by enabling private doctors and clinics to provide an easy-to-use app to their patients, including features such as transparent payment and tracking alongside live inventory levels for seamless in-app repeat requests. With the launch of its “Find a Doctor” feature, for the first time UK patients can effortlessly choose their own private doctor and then access fully streamlined medical cannabis prescriptions. The app can be accessed via the platform www.scriptassist.co.uk.

About Aurora Cannabis

Aurora is opening the world to cannabis, serving both the medical and consumer markets. Headquartered in Edmonton, Alberta, Aurora is a pioneer in global cannabis, dedicated to helping people improve their lives. The Company’s adult-use brand portfolio includes Aurora Drift, San Rafael ’71, Daily Special, Tasty’s, Being and Greybeard. Medical cannabis brands include MedReleaf, CanniMed, Aurora and Whistler Medical Marijuana Co, as well as international brands, Pedanios, Bidiol and CraftPlant. Through its subsidiary Aurora Europe GmbH, Aurora supplies high-quality medical cannabis products to patients in the German, Polish and UK markets among others, making it one of the largest authorized importers and distributors in the European Union & UK. Aurora also has a controlling interest in Bevo Farms Ltd., North America’s leading supplier of propagated agricultural plants. Driven by science and innovation, and with a focus on high-quality cannabis products, Aurora’s brands continue to break through as industry leaders in the medical, performance, wellness and adult recreational markets wherever they are launched. Aurora carries out its operations in compliance with all applicable laws in the countries in which it operates. Learn more at www.auroramj.com and follow us on X and LinkedIn.

Aurora’s common shares trade on the Nasdaq and TSX under the symbol “ACB” and is a constituent of the S&P/TSX Composite Index.

Forward Looking Information

This news release includes statements containing certain “forward-looking information” within the meaning of applicable securities law (“forward-looking statements“). Forward-looking statements are frequently characterized by words such as “plan”, “continue”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements made in this news release include statements regarding the Company’s partnership with Script Assist, including with respect to the availability of the Company’s medical cannabis products for patients in the UK and the Company’s continued commitment to further improve the UK medical cannabis landscape.

These forward-looking statements are only predictions. Forward looking information or statements contained in this news release have been developed based on assumptions management considers to be reasonable. Material factors or assumptions involved in developing forward-looking statements include, without limitation, publicly available information from governmental sources as well as from market research and industry analysis and on assumptions based on data and knowledge of this industry which the Company believes to be reasonable. Forward-looking statements are subject to a variety of risks, uncertainties and other factors that management believes to be relevant and reasonable in the circumstances could cause actual events, results, level of activity, performance, prospects, opportunities or achievements to differ materially from those projected in the forward-looking statements. These risks include, but are not limited to, the ability to retain key personnel, the ability to continue investing in infrastructure to support growth, the ability to obtain financing on acceptable terms, the continued quality of our products, customer experience and retention, the development of third party government and non-government consumer sales channels, management’s estimates of consumer demand in Canada and in jurisdictions where the Company exports, expectations of future results and expenses, the risk of successful integration of acquired business and operations (with respect to the Transaction and more generally with respect to future acquisitions), management’s estimation that SG&A will grow only in proportion of revenue growth, the ability to expand and maintain distribution capabilities, the impact of competition, the general impact of financial market conditions, the yield from cannabis growing operations, product demand, changes in prices of required commodities, competition, and the possibility for changes in laws, rules, and regulations in the industry, epidemics, pandemics or other public health crises, including the current outbreak of COVID-19, and other risks, uncertainties and factors set out under the heading “Risk Factors” in the Company’s annual information from dated June 14, 2023 (the “AIF”) and filed with Canadian securities regulators available on the Company’s issuer profile on SEDAR+ at www.sedarplus.com and filed with and available on the SEC’s website at www.sec.gov. The Company cautions that the list of risks, uncertainties and other factors described in the AIF is not exhaustive and other factors could also adversely affect its results. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such information. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.

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Contact: For Media: Michelle Lefler, VP, Communications & PR, [email protected]; For Investors: ICR, Inc., [email protected]   

                                                      

Cision View original content:https://www.prnewswire.co.uk/news-releases/aurora-partners-with-script-assist-to-provide-better-access-to-uk-medical-cannabis-302074112.html

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