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Jumia Reports First Quarter 2019 Results

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GMV grew by 58%, leading to a 102% increase in
Marketplace revenue

Jumia continued to deliver cost efficiency improvements

JumiaPay entered into a strategic partnership with Mastercard who
also made a €50 million investment in Jumia

LAGOS, Nigeria–(BUSINESS WIRE)–Jumia Technologies AG (NYSE:JMIA) (“Jumia” or the Company) announced
today its financial results for the quarter ended March 31, 2019.

“Jumia delivered excellent results during the first quarter of 2019:
strong GMV growth of 58% leading to 102% growth in marketplace revenue,
year-on-year improvement of 356 basis points of Operating loss as a
percentage of GMV and further development of JumiaPay, highlighted by
the investment by and partnership with Mastercard,” said Sacha
Poignonnec and Jeremy Hodara, co-CEOs of Jumia. “We believe that Jumia
is increasingly relevant for consumers and sellers in Africa. Looking
ahead, we remain focused on our core operations, driving consumer
adoption and engagement on our marketplace, increasing the penetration
of JumiaPay, while continuing to improve our financial profile and
making a sustainable impact on the continent.”

Business highlights

  • The €50 million investment by Mastercard into Jumia, in a concurrent
    private placement with our Initial Public Offering, marked another
    milestone in the development of JumiaPay and a validation of its
    potential. We are partnering with Mastercard on a number of
    initiatives, including the development and marketing of co-branded
    products (i.e., cards, virtual cards and quick response codes).
  • In the first quarter of 2019, our marketplace continued to gain depth
    and diversity as we focused on attracting quality sellers to our
    platform and providing our consumers with an expanding range of
    products and services. An example of this strategy is the partnership
    we announced this quarter with the technology leader Xiaomi. As part
    of this partnership, we are opening the Mi official store on our
    platform with the ability to offer a number of Xiaomi products on an
    exclusive basis. This demonstrates the attractiveness of Jumia as a
    destination of choice for high profile international brands, giving
    them access to millions of potential consumers in Africa with one
    partnership.

Financial highlights

  • Gross Merchandise Volume (“GMV”) grew this quarter by 58% on a yearly
    basis, on the back of strong marketplace growth, leading to a 102%
    increase this quarter in Marketplace revenue on a yearly basis. Our
    strong GMV growth combined with the attractive value proposition we
    offer both sellers and consumers are a key engine of monetization,
    which we derive from diversified revenue streams such as Commissions,
    Fulfillment, Value Added Services, Marketing and Advertising services.
  • Gross Profit margin as a percentage of GMV increased from 5.6% in the
    first quarter of 2018 to 6.5% this quarter, as a result of the
    increased GMV monetization rate. Our Gross Profit also exceeded
    Fulfillment expense this quarter.
  • We continue to have a strong focus on cost efficiency. Leveraging our
    strong brand awareness and highly localized marketing approach, we
    have been able to gain 205bps of marketing efficiency this quarter,
    bringing the Sales & Advertising expense from 7.2% of GMV in the first
    quarter of 2018 to 5.1% in the first quarter of 2019.
  • Adjusted EBITDA loss as a percentage of GMV improved from negative
    19.8% in the first quarter of 2018 to negative 16.4% in the first
    quarter of 2019.

Selected Operational KPIs

         
2018 2019
First Quarter     Second Quarter     Third Quarter     Fourth Quarter First Quarter
                           
GMV1 (€ million)     152     166     198     311 240
LTM Active Consumers2 (million)     3.0     3.2     3.5     4.0 4.3
           

1 GMV corresponds to the total value of orders including shipping
fees, value added tax, and before deductions of any discounts or
vouchers, irrespective of cancellations or returns.

2
Active Consumers means unique consumers who placed an order on our
marketplace within the 12-month period preceding the relevant date,
irrespective of cancellations or returns

  • GMV increased by 57.6% from €152 million in the first quarter of 2018
    to €240 million in the first quarter of 2019, on the back of strong
    growth of both Active Consumers and spend per Active Consumer.
  • The number of Active Consumers at March 31st, 2019 was 4.3 million, up
    from 3.0 million a year ago. We believe that a major driver of our
    Active Consumers growth is the continued expansion of our product
    offering and the growing relevance of our platform, which drives
    consumer adoption and engagement.

Selected Financial Information

1. Revenue

The following table shows a breakdown of revenue, for the first quarters
of 2018 and 2019.

       
For the three months ended March 31st YoY
(€ million) 2018     2019 Change
                   
Marketplace revenue     7.9     16.0     102.3%
Commissions 2.8     5.5 95.5%
Fulfillment 2.3 5.0 116.1%
Marketing 0.3 0.9 200.7%
Value Added Services 2.5 4.6 85.8%
First Party revenue     19.8     15.6     (21.2%)
Platform revenue     27.7     31.7     14.1%
Non-Platform revenue     0.6     0.2     (68.1%)
Revenue     28.3     31.8     12.3%
 
  • First Party/ Marketplace mix. Our primary
    sources of revenue are commissions and fees generated from third-party
    sales (“Marketplace revenue” or “Revenue related to third-party
    sales”) and revenue from sales of goods we undertake ourselves (“First
    Party revenue” or ““Revenue related to first-party sales”). Shifts in
    the mix between first party and marketplace activities trigger
    substantial variations in our Revenue as we record the full sales
    price net of returns as First Party revenue and only commissions and
    fees in the case of Marketplace revenue. Accordingly, we steer our
    operations not on the basis of our total revenue, but rather on the
    basis of Gross profit, as changes between third-party and first-party
    sales mix are largely eliminated at the Gross profit level. Over time,
    it is our goal to reduce the proportion of first party activity in
    favor of third-party activity at group level. This strategy may
    however vary from quarter to quarter and from country to country.
  • Marketplace revenue increased by 102.3%
    in the first quarter of 2019 compared to the first quarter of 2018, on
    the back of strong revenue growth across all components of Marketplace
    revenue, demonstrating our ability to monetize the platform as we
    continue to grow overall GMV.

    • Commissions, which are charged to our sellers, grew by 95.5%
    • Fulfillment, which are delivery fees charged to consumers, grew by
      116.1%
    • Value Added Services, which include revenue from services charged
      to our sellers such as logistics services, packaging, or content
      creation, grew by 85.8%
    • Marketing and advertising, which include performance marketing
      campaigns, or the placement of banners on our platform, grew by
      200.7%
  • First Party revenue decreased by 21.2% as
    we conducted fewer sales of goods on a first party basis. We undertake
    our first party activity in an opportunistic manner to complement the
    breadth of product assortment on our platform, usually in areas where
    we see unmet consumer demand.

2. Gross Profit

       

 

For the three months ended March 31st YoY
(€ million) 2018     2019 Change
                   
Gross profit     8.6     15.7     82.3%
As % of GMV 5.6%     6.5%
 

Gross profit increased by 82.3% from €8.6 million in the first quarter
of 2018 to €15.7 million in the first quarter of 2019, primarily due to
an increase in Marketplace revenue.

Gross profit margin as a percentage of GMVincreased from 5.6% in the
first quarter of 2018 to 6.5% in the first quarter of 2019 as a result
of increased platform monetization.

3. Fulfillment Expense

       
For the three months ended March 31st YoY
(€ million) 2018     2019 Change
                   
Fulfillment expense     (9.6)     (15.2)     59.4%
As % of GMV 6.3%     6.3%
 

Fulfillment expense includes expenses related to services of third-party
logistics providers, expenses related to our network of warehouses and
pick-up stations, including employee benefit expenses. Fulfillment
expense is influenced by a number of factors including:

  • The origin of the goods, for example the cost of shipping a product
    from a cross-border seller based overseas is higher than shipping from
    a local seller
  • The destination of the package and type of delivery, for example main
    city vs. secondary city vs. rural area, and home delivery vs. pick-up
    station
  • The type of goods, for example the cost of delivery is higher for a
    large home appliance than a fashion accessory

Despite an increase this quarter in the freight and shipping expense
portion of Fulfillment expense, as a result of higher proportion of
cross-border sales, our Gross Profit exceeded Fulfillment expense this
quarter.

4. Sales & Advertising Expense

       
For the three months ended March 31st YoY
(€ million) 2018     2019 Change
                   
Sales & Advertising expense     10.9     12.3     12.5%
As % of GMV 7.2%     5.1%
 

Our Sales and Advertising expense increased by 12.5% to €12.3 million in
the first quarter of 2019 from €10.9 million in the first quarter of
2018, while we were able to increase our GMV by 57.6% over the same
period. As a result, Sales and Advertising expense as a percentage of
GMV, decreased from 7.2% in the first quarter of 2018 to 5.1% in the
first quarter of 2019, demonstrating the relevance of our marketing
strategy as well as the continuous user adoption of our platform.

5. General and Administrative Expense, Technology
and Content Expense

       
For the three months ended March 31st YoY
(€ million) 2018     2019 Change
   
General and Administrative (“G&A”) expense 17.4 27.8 59.9%
Share-Based Compensation (“SBC”) expense     (3.6)     (4.3)     18.2%
G&A expense, excluding SBC     13.7     23.5     71.0%
As % of GMV     9.0%     9.8%      
Technology & Content expense     5.1     5.9     15.3%
As % of GMV     3.3%     2.4%      
G&A, Technology & Content expense, excluding SBC     18.8     29.3     55.9%
As % of GMV 12.3% 12.2%
 

General and Administrative expense contains wages and benefits,
including share-based payment expense of management, as well as seller
management, commercial development, accounting and legal staff,
consulting expense, audit expense, office rent and related utilities,
insurance and other overhead expense.

General and Administrative expense excluding SBC increased by 71.0% from
€13.7 million in the first quarter of 2018 to €23.5 million in the first
quarter of 2019. As a percentage of GMV, General & Administrative
expense excluding SBC, increased from 9.0% in the first quarter of 2018
to 9.8% in the first quarter of 2019, as the improvements due to
operating leverage were more than offset by non-recurring expenses
concomitant with the IPO.

Technology and Content expense increased by 15.3% from €5.1 million in
the first quarter of 2018 to €5.9 million in the first quarter of 2019.
As a percentage of GMV, Technology and content expense, decreased from
3.3% in the first quarter of 2018 to 2.4% in the first quarter of 2019,
as a result of operating leverage.

6. Operating Loss and Adjusted EBITDA

   
For the three months ended March 31st
(€ million) 2018     2019
   
Operating loss (34.3) (45.5)
Depreciation and amortization 0.5 1.7
Share-Based Compensation (“SBC”) expense     3.6     4.3
Adjusted EBITDA     (30.2)     (39.5)
As % of GMV (19.8%) (16.4%)
 

Adjusted EBITDA loss, as a percentage of GMV improved from negative
19.8% in the first quarter of 2018 to negative 16.4% in the first
quarter of 2019 as a result of a higher gross profit margin as a
percentage of GMV, marketing efficiencies and operating leverage
improving Technology & Content expense as a percentage of GMV.

On January 1, 2019, we adopted IFRS 16 accounting guidance amending the
accounting for leases. This led to a reduction of G&A by approximately
€1.1 million in the first quarter of 2019 and an increase in
Depreciation and amortization by approximately €1.3 million, resulting
in a positive impact on Adjusted EBITDA of €1.1 million in the first
quarter of 2019 and a negative impact on Operating loss of €0.2 million.
Prior period amounts were not retrospectively adjusted.

7. Net IPO Proceeds

As of March 31st, 2019, we had €132.2 million of Cash and cash
equivalent on the balance sheet.

After the balance sheet date, we completed our Initial Public Offering.
The net proceeds from our Initial Public Offering, the investment by
Mastercard, the issuance of anti-dilution shares to certain of our
existing shareholders and the exercise by the underwriters of their
option to purchase additional ADRs added $280.2 million to our cash and
cash equivalents in April 2019.

Conference Call and Webcast information

Jumia will host a conference call today, May 13, 2019 at 8:30 a.m. U.S.
Eastern Time to discuss Jumia’s results. Details of the conference call
are as follows:

Participant Dial in (Toll Free): 1-888-317-6016

Participant International Dial in: 1-412-317-6016

Canada Toll Free: 1-855-669-9657

A live webcast of the earnings conference call can be accessed on the
Jumia Investor Relations website: https://investor.jumia.com/

An archived webcast will be available following the call.

(UNAUDITED)

Consolidated statement of comprehensive income
for the quarters ended March 31, 2019 and 2018

     
For the three months ended
March 31       March 31
In millions of EUR       2019       2018
 
 
Revenue 31.8 28.3
Cost of revenue       16.2       19.8
Gross profit 15.7 8.6
 
Fulfillment expense 15.2 9.6
Sales and advertising expense 12.3 10.9
Technology and content expense 5.9 5.1
General and administrative expense 27.8 17.4
Other operating income 0.1 0.1
Other operating expense       0.0       0.0
Operating loss (45.5) (34.3)
 
Finance income 0.6 0.6
Finance costs       0.8       0.3
Loss before Income tax (45.7) (34.0)
 
Income tax expense       0.1       0.1

Loss for the period

      (45.8)       (34.1)
 
Attributable to:
Equity holders of the Company (45.7) (33.6)
Non-controlling interests       (0.1)       (0.5)

Loss for the period

      (45.8)       (34.1)
 
Other comprehensive income/loss to be classified to profit or
loss in subsequent periods
Exchange differences on translation of foreign operations – net of
tax
(11.9) 6.6
Other comprehensive income / (loss) on net investment in foreign
operations – net of tax
      12.2       (6.6)
Other comprehensive loss       0.4       (0.1)

Total comprehensive loss for the period

      (45.4)       (34.2)
 
Attributable to:
Equity holders of the Company (45.4) (33.7)
Non-controlling interests       (0.1)       (0.4)

Total comprehensive loss for the period

      (45.4)       (34.2)
 

(UNAUDITED)

Consolidated Statement of financial position as
of March 31, 2019 and 2018

           
As of
March 31 December 31
In millions of EUR       2019       2018
 
 
Assets
 
Non-current assets
Property and equipment 15.5 5.0
Intangible assets 0.1 0.2
Deferred tax assets 0.2 0.2
Other non-current assets       1.4       1.3
Total Non-current assets       17.2       6.6
 
Current assets
Inventories 11.0 9.4
Trade and other receivables 13.3 13.0
Other taxes receivable 5.5 4.9
Prepaid expense and other current assets 12.6 7.4
Cash and cash equivalents       132.2       100.6
Total Current assets       174.7       135.4
Total Assets       191.9       142.0
 
Equity and Liabilities
 
Equity
Share capital 0.1 0.0
Share premium 0.8 0.8
Other reserves 0.1 0.1
Accumulated losses       (0.9)       (0.9)
Equity attributable to the equity holders of the Company 81.1 50.0
Non-controlling interests       (0.2)       (0.1)
Total Equity       80.9       49.8
 
Liabilities
Non-current liabilities 0.0 0.0
Non-current borrowings       6.0       0.0
Total Non-current liabilities       6.0       0.0
 
Current liabilities
Borrowings 3.4 0.0
Trade and other payables 58.6 47.7
Income tax payables 0.1 0.1
Other taxes payable 7.6 7.4
Provisions for liabilities and other charges 31.3 30.4
Deferred income       3.9       6.5
Total Current liabilities       104.9       92.2
Total Liabilities       110.9       92.2
Total Equity and Liablities       191.9       142.0
 

(UNAUDITED)

Consolidated statement of cash flows for the
quarters ended March 31, 2019 and 2018

     
For the three months ended
March 31       March 31
In millions of EUR       2019       2018
 
Loss before Income tax (45.7) (34.0)
 
Depreciation and amortization 1.7 0.5
Impairment losses on loans, receivables and other assets 0.5 0.3
Impairment losses on obsolete inventories 0.2 (0.0)
Share-based payment expense 4.3 3.6
Loss/(Gain) on disposal of property, equipments and intangible assets 0.0 0.0
(Gain) /Loss on disposal of financial assets 0.0 0.0
Net accrued interest and similar (income)/expense 0.2 (0.0)
Net unrealized foreign exchange (gain)/loss (0.1) (0.4)
(Increase)/Decrease in trade and other receivables, prepayments and
VAT receivables
(7.3) 0.6
(Increase)/Decrease in inventories (1.7) 0.8
Increase/(Decrease) in trade and other payables, prepayments and VAT
payables
8.0 (4.7)
Change in provision for other liabilities and charges 0.6 (0.0)
Income taxes paid       (0.1)       0.1
Net cash flows used in operating activities       (39.3)       (33.1)
 
Cash flows from investing activities
Purchase of property and equipment (0.7) (0.5)
Proceeds from sale of property and equipment 0.0 0.0
Purchase of intangible assets 0.0 (0.0)
Consolidated securities investment (0.0) 0.0
Purchase of financial assets (0.0) 0.0
Movement in other non-current assets       0.1       (0.3)
Net cash flows used in investing activities       (0.7)       (0.8)
 
Cash flows from financing activities
Proceeds from borrowings 0.0 0.0
Financial interest paid (0.3) 0.0
Payment of lease liabilities (0.8) 0.0
Capital contributions 75.0 24.0
Expenses reclassed to Equity       (2.7)       0.0
Net cash flows from financing activities       71.2       24.0
Net increase in cash and cash equivalents       31.2       (9.9)
Effect of exchange rate changes on cash and cash equivalents       0.4       (0.4)

Cash and cash equivalents at the beginning of the period

      100.6       29.7

Cash and cash equivalents at the end of the period

      132.2       19.4
 

Non-IFRS and Other Financial and Operating
Metrics

This release includes certain financial measures and metrics not based
on IFRS, including Adjusted EBITDA, as well as operating metrics,
including GMV and Active Consumers. We define GMV, Active Consumers and
Adjusted EBITDA as follows:

GMV corresponds to the total value of
orders including shipping fees, value added tax, and before deductions
of any discounts or vouchers, irrespective of cancellations or returns.

Active Consumers means unique consumers who
placed an order on our marketplace within the 12-month period preceding
the relevant date, irrespective of cancellations or returns.

Adjusted EBITDA corresponds to loss for the
year, adjusted for income tax expense, finance income, finance costs,
depreciation and amortization and share-based payment expense.

Adjusted EBITDA is a supplemental non-IFRS measure of our operating
performance that is not required by, or presented in accordance with,
IFRS. Adjusted EBITDA is not a measurement of our financial performance
under IFRS and should not be considered as an alternative to loss for
the year, loss before income tax or any other performance measure
derived in accordance with IFRS. We caution investors that amounts
presented in accordance with our definition of Adjusted EBITDA may not
be comparable to similar measures disclosed by other companies, because
not all companies and analysts calculate Adjusted EBITDA in the same
manner. We present Adjusted EBITDA because we consider it to be an
important supplemental measure of our operating performance. Management
believes that investors’ understanding of our performance is enhanced by
including non-IFRS financial measures as a reasonable basis for
comparing our ongoing results of operations. By providing this non-IFRS
financial measure, together with a reconciliation to the nearest IFRS
financial measure, we believe we are enhancing investors’ understanding
of our business and our results of operations, as well as assisting
investors in evaluating how well we are executing our strategic
initiatives.

Management uses Adjusted EBITDA:

  • as a measurement of operating performance because it assists us in
    comparing our operating performance on a consistent basis, as it
    removes the impact of items not directly resulting from our core
    operations;
  • for planning purposes, including the preparation of our internal
    annual operating budget and financial projections;
  • to evaluate the performance and effectiveness of our strategic
    initiatives; and
  • to evaluate our capacity to expand our business.

Items excluded from this non-IFRS measure are significant components in
understanding and assessing financial performance. Adjusted EBITDA has
limitations as an analytical tool and should not be considered in
isolation, or as an alternative to, or a substitute for analysis of our
results reported in accordance with IFRS, including loss for the year.
Some of the limitations are:

  • Adjusted EBITDA does not reflect our share-based payments, income tax
    expense or the amounts necessary to pay our taxes;
  • although depreciation and amortization are eliminated in the
    calculation of Adjusted EBITDA, the assets being depreciated and
    amortized will often have to be replaced in the future and such
    measures do not reflect any costs for such replacements; and
  • other companies may calculate Adjusted EBITDA differently than we do,
    limiting its usefulness as a comparative measure.

Due to these limitations, Adjusted EBITDA should not be considered as a
measure of discretionary cash available to us to invest in the growth of
our business. We compensate for these and other limitations by providing
a reconciliation of Adjusted EBITDA to the most directly comparable IFRS
financial measure, loss for the year.

The following tables provide a reconciliation of loss for the year to
Adjusted EBITDA for the periods indicated:

   
For the three months ended March 31st
(€ million) 2018     2019
             
Loss for the period     (34.1)     (45.8)
Income tax expense 0.1     0.1
Finance costs 0.3 0.8
Finance income (0.6) (0.6)
Depreciation and amortization 0.5 1.7
Share-based payment exercise     3.6     4.3
Adjusted EBITDA     (30.2)     (39.5)
 

Contacts

Safae Damir
Head of Investor Relations
[email protected]

Abdesslam
Benzitouni
Head of PR and Communications
[email protected]


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Cannabis

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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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