Company to refocus resources and efforts on the Israeli and
German markets; Commences exit of the Canadian market
TORONTO and GLIL YAM, Israel, Nov. 14,
2022 /PRNewswire/ -- IM Cannabis Corp. (the
"Company", "IM Cannabis", or "IMC") (CSE: IMCC) (NASDAQ:
IMCC), a leading medical cannabis company, provided financial
results for its third quarter ended September 30, 2022. All amounts are reported in
Canadian dollars unless otherwise stated.
Q3 2022 Highlights
- Revenues for Q3 2022 were $14.2
million, compared to $8.0
million on Q3 2021, an increase of 78%, representing a 12%
sequential organic growth.
- Gross profit, before fair value adjustments, for Q3 2022
was $2.8 million, compared to
$2.0 million in Q3 2021, an increase
of 39%.
- Gross Margin, before fair value adjustments, for Q3 2022
was 20%, compared to 25% in Q3 2021.
- Canadian restructuring efforts continued with the decision to
seek a sale of the Company's Canadian operations in September 2022. On November 7, 2022, the Company announced that it
was commencing an exit of the Canadian cannabis market to focus its
resources on pursuing growth opportunities in Israel, Germany and Europe. Trichome and certain of its
wholly-owned subsidiaries ("Trichome"), filed for and obtained
creditor protection under the Canadian Companies' Creditors
Arrangement Act ("CCAA"). The CCAA proceedings are solely in
respect of Trichome. As such, the Company's other assets or
subsidiaries, including those in Israel and Germany, are not parties to the CCAA
proceedings.
- Trichome's assets and associated liabilities are classified as
"held for sale" in the consolidated statement of financial position
as of September 30, 2022 and as
"discontinued operations" in the consolidated statements of profit
or loss and other comprehensive income for all periods
presented.
- Total assets as of September 30,
2022 were $129.1 million
compared to $287.4 million as of
December 31, 2021, representing a
decrease of $158.3 million or 55%.
This decrease in the Company's Total Assets was primarily due to
the goodwill impairment of Trichome in the amount of $107.9 million.
Management Commentary
"The third quarter marked a pivotal moment on our trajectory to
profitability," said Oren
Shuster, Chief Executive Officer of IM Cannabis. "By
commencing our exit from Canada,
we are now concentrating all our efforts on our highest value
markets, Israel and Germany, to accelerate our path to
profitability and long-term shareholder value."
"We will continue building on the increasing demand and positive
momentum in Israel, supported by
strategic alliances with Canadian suppliers and skilled sourcing
team, to cement our leadership position. In parallel, we are
advancing a long-term growth plan in Germany, based on replicating our success in
Israel. We are also preparing
ourselves for the proposed legalization of recreational cannabis in
Germany."
"We continue to be strongly focused on generating efficiencies
and synergies, bringing all our financial and human capital to
support growth and profitability in Israel and Germany," concluded Shuster.
Q3 2022 Business Highlights
- The Company appointed Einat
Zakariya and Moti Marcus to
its board of directors, replacing Vivian
Bercovici and Haleli Barath, each of whom resigned to pursue
other opportunities.
- Signed an international trademark licensing agreement with
Avant Brands, granting IMC the exclusive right to launch the BLKMKT
brand in Israel. The integration
of the unique and exclusive varieties of the high-quality BLKMKT
brand into the current IMC premium product portfolio will serve to
bolster the cooperative and synergistic partnership forged between
the two companies over the past two years. It will further
strengthen IMC's business model in Israel that offers medical cannabis patients
quality, ultra-premium brands.
- Received the initial international shipment from Canadian
supplier SNDL, consisting export of approximately 167 kilograms of
premium dried flower delivered to Israel as part of SNDL's total commitment with
IMC. SNDL and the Company have agreed to the aggregate export of
1,000 kilograms of high-quality dried flower products from
Canada to Israel for processing and distribution in the
Israeli medical cannabis market. The completed export continues the
Company's streamlining approach to provide the Israeli market with
the high-quality products it has come to expect.
- The Company's legacy strain Roma® was voted as the Favorite
Strain of the Month in August 2022 by
'Cannabis', one of Israel's
leading cannabis blogs for Israeli medical cannabis patients.
- The Company introduced the Top-Shelf Collection in Israel in September
2022 as a premium product line with indoor-grown, high-THC
cannabis flowers. In addition, as part of IMC's Craft Collection,
which is the ultra-premium indoor-grown product line, the Company
introduced 'Watermelon Zkittlez' with record breaking success and
strong patient demand for continuity.
Q3 2022 Financial Results
- Revenues for Q3 2022 were $14.2
million, compared to $8.0
million on Q3 2021, an increase of 78%, representing a 12%
sequential organic growth.
The increase in revenues is primarily attributed to the increase in
the quantity of medical cannabis products sold, as well as from the
higher average selling price per gram the Company realized from its
portfolio of premium and ultra-premium branded cannabis products in
Israel.
- Total Dried Flower sold in Q3 2022 was 1,453 kilograms
at an average selling price of $9.08
per gram, compared to 1,175 kilograms for the same period in 2021
at an average selling price of $6.61
per gram. The change in the average selling price reflects a 37%
increase.
- Gross Profit, before Fair Value Adjustments, in Q3 2022
was $2.8 million compared to
$2.0 million in Q3 2021.
- Gross Margin for Q3 2022 was 20% compared to 25% in Q3
2021. The decrease is mainly attributed to an expired local
non-premium inventory write-off.
- General and Administrative Expenses in Q3 2022 were
$4.3 million compared to $3.7 million in Q3 2021. The increase is mainly
attributable to increase in professional and legal services in
relation to the capital markets where the Company is listed.
- Selling and Marketing Expenses in Q3 2022 were
$2.8 million, compared to
$1.7 million in Q3 2021. The increase
is mainly attributed to the Company's increased marketing efforts
in Israel, brand launch in
Germany, increased distribution
expenses, and increased staffing from acquisitions, in line with
our expectations.
- Total Operating Expenses in Q3 2022 were $7.5 million compared to $8.0 million in the third quarter of 2021.
- Operating Loss for Q3 2022 was $5.5 million, compared to $8.1 million in Q3 2021.
- Non-IFRS Adjusted EBITDA loss from continuing operations
in Q3 2022 was $3.7 million, compared
to an Adjusted EBITDA loss of $2.3 in
Q3 2021. The increase is mainly attributable to corporate expenses
and related legal expenses with connection to the Company's exit
from the Canadian market.
- Net Loss from Continuing Operations for Q3 2022 was
$4.5 million, compared with net
income of $0.8 million in Q3
2021.
- Basic Loss per Share attributable to equity holders of
the Company from continuing operations was $0.06 compared to basic earnings per share of
$0.03 in Q3 2021.
- Diluted Loss per Share attributable to equity holders of
the Company from continuing operations was $0.06 compared to diluted loss per share of
$0.09 in Q3 2021.
- Net loss from Discontinued Operations for Q3 2022 was
$123.6 million, compared with a loss
of $6.5 million in Q3 2021. This
decrease was primarily due to the goodwill impairment of Trichome
in the amount of $107.9 million.
- Basic and Diluted Loss per Share attributable to equity
holders of the Company from discontinued operations was
$1.75 compared to basic and diluted
loss per share of $0.10 in Q3
2021.
- Cash and Cash Equivalents as of September 30, 2022 were $3.2 million compared with $13.9 million on December
31, 2021.
- By commencing the exit from the Canadian market, the Company
has been able to reduce its debt level. Debt from Continuing
Operations for September 30, 2022
was $5.1 million, representing a
decrease of approximately 57%.
The Company's financial statements as of September 30, 2022 includes a note regarding the
Company's ability to continue as a going concern. The Company's Q3
2022 financial statements do not include any adjustments relating
to the recoverability and classification of assets or liabilities
that might be necessary should the Company be unable to continue as
a going concern. For more information, please refer to the
'LIQUIDITY AND CAPITAL RESOURCES' section as well as the 'RISK
FACTORS' section in the Company's MD&A, available under the
Company's SEDAR profile at www.sedar.com on EDGAR at
www.sec.gov/edgar.
Share Consolidation
The Company will be consolidating all of its issued and
outstanding common shares (the "Common Shares") on the basis of one
(1) post-consolidation Common Share for each ten (10)
pre-consolidation Common Shares (the "Consolidation"). The
objective of the Consolidation is to enable the Company to regain
compliance with the minimum bid price requirement set forth in the
listing rules of The Nasdaq Stock Market LLC and maintain its
listing on the Nasdaq Capital Market ("NASDAQ").
The Company's board of directors approved the Consolidation and
it is expected that the Common Shares will commence trading on a
post-Consolidation basis on the Canadian Securities Exchange (the
"CSE") and NASDAQ on or about November 17,
2022.
Assuming the Consolidation is completed, the existing 75,695,325
Common Shares will be reduced to approximately 7,569,526 Common
Shares, subject to adjustments for rounding purposes. No fractional
Common Shares will be issued. Any fractional interest in Common
Shares that is less than 0.5 of a Common Share resulting from the
Consolidation will be rounded down to the nearest whole Common
Share and any fractional interest in Common Shares that is 0.5 or
greater of a Common Share will be rounded up to the nearest whole
Common Share.
The Consolidation was approved by holders of Common Shares at
the Company's annual general and special meeting held on
October 20, 2022. The Consolidation
is subject to acceptance by the CSE.
Upon completion of the Consolidation, a letter of transmittal
will be sent by mail to registered shareholders advising that the
Consolidation has taken effect. The letter of transmittal will
contain instructions on how registered shareholders can exchange
their share certificates or Direct Registration System ("DRS")
statements evidencing their pre-Consolidation Common Shares for new
share certificates or new DRS statements representing the number of
post-Consolidation Common Shares to which they are entitled.
Beneficial shareholders holding their Common Shares through an
intermediary may be subject to different procedures for obtaining
their post-Consolidation Common Shares. If you have questions in
this regard, you are encouraged to contact your intermediary.
The Company does not intend to change its name or seek a new
stock trading symbol on the CSE or NASDAQ in connection with the
Consolidation.
Financial Statements and Management's Discussion and
Analysis
The complete interim condensed consolidated financial statements
of the Company for the three and nine months ended September 30, 2022 and 2021 and related
management's discussion and analysis will be available under the
Company's SEDAR profile at www.sedar.com on EDGAR at
www.sec.gov/edgar.
Q3 2022 Conference Call
The Company will host a zoom web conference today at
9:00a.m. ET to discuss the results,
followed by a question-and-answer session for the investment
community. Investors are invited to register by clicking here. All
relevant information will be sent upon registration.
If you are unable to join us live, a recording of the call will
be available on our website at https://investors.imcannabis.com/
within 24 hours after the call.
About IM Cannabis Corp.
IM Cannabis (NASDAQ: IMCC) (CSE: IMCC) is an international
cannabis company providing premium products to medical patients in
Israel, Germany and Canada, the three largest federally legal
markets. 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. ("Focus Medical"), 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 IM Cannabis products throughout the entire value
chain. In Germany, the IMC
ecosystem operates through Adjupharm GmbH, where it also
distributes cannabis to pharmacies to medical cannabis patients. In
Canada, IMC operates through
Trichome Financial and its wholly-owned subsidiaries Trichome JWC
Acquisition Corp. and MYM Nutraceuticals Inc., where it cultivates
and processes cannabis for the adult-use market at its Ontario and Nova
Scotia facilities under the WAGNERS and Highland Grow
brands. For more information, please visit www.imcannabis.com.
Company Contact:
Maya
Lustig, Director Investor & Public Relations
IM Cannabis
+972-54-677-8100
maya.l@imcannabis.com
Oren Shuster, CEO
IM Cannabis Corp.
+972-77-3603504
info@imcannabis.com
Disclaimer for Forward-Looking Statements
This press release contains "forward-looking information" and
"forward-looking statements" within the meaning of applicable
Canadian and United States
securities laws (collectively, "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 in this press release
includes, without limitation, statements relating to the Company
leaving the Canadian cannabis market to focus on Israel, Germany and Europe; achieving profitability and
shareholder value; expectations related to demand, growth
opportunities in Israel,
Germany and Europe; demand and momentum in the Company's
Israeli operations; the restructuring of Trichome under CCAA; the
continuation of the Company's Canadian operations through Trichome
until a sale transaction or one or more other restructuring
transactions is completed; any material recovery on the Company's
equity investment in Trichome; whether the Company will recover any
of its unsecured loans to Trichome; statements relating to the
Company's business objectives and the anticipated timing of
execution in Israel, Germany and Europe; the expected cost savings from
streamlining operations in Canada
and Israel; anticipated market
reception of the BLKMKT brand in the Israeli medical cannabis
market; expectations related to the Company's import of medical
cannabis products from SNDL and other Canadian suppliers and the
market reception of such products; statements relating to the
timing, terms and completion of the Consolidation, including the
ratio of pre-consolidation Common Shares to post-consolidation
Common Shares that will be effected, non-issuance of fractional
shares, and the contents and delivery of the letter of transmittal
following completion of the Consolidation; timing for the
commencement of trading on the CSE and NASDAQ following the
completion of the Consolidation;; and the anticipated
decriminalization or legalization of adult-use recreational
cannabis in Germany and
Europe.
Forward-looking statements is based on assumptions that may
prove to be incorrect, including but not limited, the anticipated
increase in demand for medical and adult-use recreational cannabis
in the markets in which the Company operates or plans to operate;
the Company's ability to implement its growth strategies and
leverage synergies of acquisitions; the ability to import and the
supply of premium and indoor grown cannabis products from the
Company's third-party suppliers and partners; the changes and
trends in the cannabis industry; and the Company's ability to
market its brands and services successfully to its anticipated
customers and medical cannabis patients in Israel and Germany.
The above lists of forward-looking statements and assumptions
are not exhaustive. Since forward-looking statements address future
events and conditions, by their very nature they involve inherent
risks and uncertainties. Actual results may differ materially from
those currently anticipated or implied by such forward-looking
statements due to a number of factors and risks. These include:
general business risk and liability, including claims or complaints
in the normal course of business; any failure of the Company to
maintain "de facto" control over Focus Medical and/or High Way
Shinua Ltd. (together with the Company, the "Group")in
accordance with IFRS 10; limitations on stockholdings of the
Company in connection with its potential direct engagement in the
Israeli medical cannabis market; unexpected changes in governmental
policies and regulations in Canada, Israel or Germany such as the Israeli or German
government deciding to abandon efforts to decriminalize or legalize
adult-use recreational cannabis; the ability of the Company to
access future financing if needed or on terms acceptable to the
Company; the failure of the Company to comply with applicable
regulatory requirements in a highly regulated industry; the
Company's ability to continue to meet the listing requirements of
the CSE and the NASDAQ; any unexpected failure to maintain in good
standing or renew its cannabis licenses; the ability of the Group
to deliver on their sales commitments or growth objectives; the
Group's reliance on third-party supply agreements and its ability
to enter into additional 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
Groupadverse market conditions; risks of product liability and
other safety-related liability from the usage of the Company's
cannabis products; supply chain constraints; competition; reliance
on key personnel; litigation risks; the Company's ability to
continue as a going concern; the risk of defaulting on existing
debt and war and civil conflict in Eastern Europe and the Middle East.
Please see the other risks, uncertainties and factors set out
under the heading "Risk Factors" in the Company's annual
information form dated March 31,
2022, which is available on the Company's issuer profile on
SEDAR at www.sedar.com and EDGAR at www.sec.gov. 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 statements are 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.
Non-IFRS Measures
This press release includes references to "EBITDA", "Adjusted
EBITDA" and "Gross Margin", which are non-International Financial
Reporting Standards ("IFRS") financial measures. Non-IFRS
measures are not recognized measures under IFRS, do not have a
standardized meaning prescribed by IFRS, and are therefore unlikely
to be comparable to similar measures presented by other companies.
The Company defines EBITDA as earnings before interest, tax,
depreciation and amortization. EBITDA has no direct, comparable
IFRS financial measure. The Company defines adjusted EBITDA as
EBITDA adjusted by removing other non-recurring or noncash items,
including the unrealized change in fair value of biological assets,
realized fair value adjustments on inventory sold in the period,
share-based compensation expenses, depreciation of right-of-use
assets, revaluation adjustments of financial assets and liabilities
measured on a fair value basis and non-recurring transaction costs
included in operating expenses. The Company defines gross margin as
the difference between revenue and cost of goods sold divided by
revenue (expressed as a percentage), prior to the effect of a fair
value adjustment for inventory and biological assets. IMC has used
or included these non-IFRS measures solely to provide investors
with added insight into IMC's financial performance. Readers are
cautioned that such non-IFRS measures may not be appropriate for
any other purpose. Non-IFRS measures should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS.
|
For the nine months
ended September 30,
|
For the three
months ended
September 30,
|
For the Year
ended
December 31,
|
|
Operating
Loss
|
2022
|
2021
|
2022
|
2021
|
2021
|
|
$(20,082)
|
$(14,294)
|
$(5,526)
|
$(8,124)
|
$(34,053)
|
|
Depreciation &
Amortization
|
$1,942
|
$1,103
|
$626
|
$516
|
$2,125
|
|
EBITDA
|
$(18,140)
|
$(13,191)
|
$(4,900)
|
$(7,608)
|
$(31,928)
|
|
IFRS biological assets
fair value
adjustments, net
|
$1,941
|
$2,086
|
$867
|
$2,032
|
$2,263
|
|
Share-based
payments
|
$2,209
|
$3,955
|
$367
|
$2,687
|
$5,442
|
|
Costs related to the
NASDAQ listing
|
$
-
|
$1,261
|
$
-
|
$
-
|
$
-
|
|
Restructuring
cost
|
$4,383
|
$
-
|
$
-
|
$
-
|
$
-
|
|
Other non-recurring
costs
|
$
-
|
$570
|
$
-
|
$570
|
$
-
|
|
Adjusted EBITDA
(Non-IFRS)
|
$(9,607)
|
$(5,319)
|
$(3,666)
|
$(2,319)
|
$(24,223)
|
|
|
|
|
|
|
|
|
Nine months ended
|
September 30, 2022
|
September 30, 2021
|
|
|
|
Net Revenue
|
$39,874
|
$24,141
|
Cost of
sales
|
$31,374
|
$16,625
|
Gross profit before FV
adjustments
|
$8,500
|
$7,516
|
Gross margin before FV
adjustments
|
21 %
|
31 %
|
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
Canadian Dollars in
thousands
|
|
|
|
|
September
30, 2022
|
|
December 31,
2021
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
3,223
|
|
$ 13,903
|
Restricted bank
deposit
|
|
|
-
|
|
1
|
Trade
receivables
|
|
|
11,825
|
|
16,711
|
Advances to
suppliers
|
|
|
851
|
|
2,300
|
Other accounts
receivable
|
|
|
3,414
|
|
14,481
|
Loans
receivable
|
|
|
-
|
|
2,708
|
Biological
assets
|
|
|
-
|
|
1,687
|
Inventories
|
|
|
16,634
|
|
29,391
|
Assets
held-for-sale
|
|
|
60,618
|
|
-
|
|
|
|
|
|
|
|
|
|
96,565
|
|
81,182
|
|
|
|
|
|
|
NON-CURRENT
ASSETS:
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
5,088
|
|
30,268
|
Investments in
affiliates
|
|
|
2,413
|
|
2,429
|
Advance payment for
intangible assets of pharmacy
|
|
|
6,448
|
|
3,129
|
Derivative
assets
|
|
|
-
|
|
14
|
Right-of-use assets,
net
|
|
|
2,243
|
|
18,162
|
Deferred tax
assets
|
|
|
543
|
|
16
|
Intangible assets,
net
|
|
|
5,978
|
|
30,885
|
Goodwill
|
|
|
9,788
|
|
121,303
|
|
|
|
|
|
|
|
|
|
32,501
|
|
206,206
|
|
|
|
|
|
|
Total assets
|
|
|
$ 129,066
|
|
$
287,388
|
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
Canadian Dollars in
thousands
|
|
|
|
|
September
30, 2022
|
|
December 31,
2021
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
Trade
payables
|
|
|
$ 11,775
|
|
$ 13,989
|
Bank loans and credit
facilities
|
|
|
5,139
|
|
9,502
|
Other accounts payable
and accrued expenses
|
|
|
5,481
|
|
20,143
|
Accrued purchase
consideration liabilities
|
|
|
2,593
|
|
6,039
|
Current maturities of
operating lease liabilities
|
|
|
636
|
|
1,554
|
Liabilities directly
associated with assets held-for-sale
|
|
|
43,613
|
|
-
|
|
|
|
|
|
|
|
|
|
69,237
|
|
51,227
|
|
|
|
|
|
|
NON-CURRENT
LIABILITIES:
|
|
|
|
|
|
Warrants measured at
fair value
|
|
|
116
|
|
6,022
|
Operating lease
liabilities
|
|
|
1,611
|
|
17,820
|
Long-term
loans
|
|
|
370
|
|
392
|
Employee benefit
liabilities, net
|
|
|
383
|
|
391
|
Deferred tax
liability, net
|
|
|
1,377
|
|
6,591
|
|
|
|
|
|
|
|
|
|
3,857
|
|
31,216
|
|
|
|
|
|
|
Total
liabilities
|
|
|
73,094
|
|
82,443
|
|
|
|
|
|
|
EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF
THE COMPANY:
|
|
|
|
|
|
Share capital and
premium
|
|
|
245,202
|
|
237,677
|
Treasury
stock
|
|
|
(660)
|
|
(660)
|
Translation
reserve
|
|
|
1,723
|
|
2,614
|
Reserve from
share-based payment transactions
|
|
|
14,678
|
|
12,348
|
Accumulated
deficit
|
|
|
(206,606)
|
|
(50,743)
|
|
|
|
|
|
|
Total equity
attributable to equity holders of the Company
|
|
|
54,337
|
|
201,236
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
1,635
|
|
3,709
|
|
|
|
|
|
|
Total equity
|
|
|
55,972
|
|
204,945
|
|
|
|
|
|
|
Total liabilities and
equity
|
|
|
$ 129,066
|
|
$
287,388
|
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
|
AND OTHER
COMPREHENSIVE INCOME
|
Canadian Dollars in
thousands, except per share data
|
|
|
|
Nine months
ended
September
30,
|
|
Three months
ended
September
30,
|
|
|
2022
|
|
2021
(*)
|
|
2022
|
|
2021
(*)
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$ 39,874
|
|
$ 24,141
|
|
$
14,170
|
|
$
8,040
|
Cost of
revenues
|
|
31,374
|
|
16,625
|
|
11,351
|
|
6,007
|
|
|
|
|
|
|
|
|
|
Gross profit before
fair value adjustments
|
|
8,500
|
|
7,516
|
|
2,819
|
|
2,033
|
|
|
|
|
|
|
|
|
|
Fair value
adjustments:
|
|
|
|
|
|
|
|
|
Unrealized change in
fair value of biological assets
|
|
(315)
|
|
5,464
|
|
-
|
|
436
|
Realized fair value
adjustments on inventory sold in the period
|
|
(1,626)
|
|
(7,626)
|
|
(866)
|
|
(2,544)
|
|
|
|
|
|
|
|
|
|
Total fair value
adjustments
|
|
(1,941)
|
|
(2,162)
|
|
(866)
|
|
(2,108)
|
|
|
|
|
|
|
|
|
|
Gross profit
(loss)
|
|
6,559
|
|
5,354
|
|
1,953
|
|
(75)
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses
|
|
11,670
|
|
11,848
|
|
4,315
|
|
3,653
|
Selling and marketing
expenses
|
|
8,379
|
|
3,845
|
|
2,797
|
|
1,709
|
Restructuring
expenses
|
|
4,383
|
|
-
|
|
-
|
|
-
|
Share-based
compensation
|
|
2,209
|
|
3,955
|
|
367
|
|
2,687
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
26,641
|
|
19,648
|
|
7,479
|
|
8,049
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
(20,082)
|
|
(14,294)
|
|
(5,526)
|
|
(8,124)
|
|
|
|
|
|
|
|
|
|
Finance income,
net
|
|
3,782
|
|
22,197
|
|
1,198
|
|
8,620
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
|
(16,300)
|
|
7,903
|
|
(4,328)
|
|
496
|
Income tax expense
(benefit)
|
|
(1,029)
|
|
206
|
|
204
|
|
(334)
|
|
|
|
|
|
|
|
|
|
Net income
(loss) from continuing
operations
|
|
(15,271)
|
|
7,697
|
|
(4,532)
|
|
830
|
|
|
|
|
|
|
|
|
|
Net loss from
discontinued operations, net of tax (Note 10)
|
|
(142,581)
|
|
(13,727)
|
|
(123,643)
|
|
(6,486)
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(157,852)
|
|
(6,030)
|
|
(128,175)
|
|
(5,656)
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss) that will not be reclassified
to profit or loss in subsequent periods:
|
|
|
|
|
|
|
|
|
Exchange differences
on translation to presentation currency
|
|
(1,630)
|
|
(350)
|
|
1,312
|
|
888
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss) that will be
reclassified to profit
or loss in subsequent periods:
|
|
|
|
|
|
|
|
|
Adjustments arising
from translating financial
statements of
foreign operation
|
|
654
|
|
288
|
|
(549)
|
|
29
|
|
|
|
|
|
|
|
|
|
Total other
comprehensive income (loss)
|
|
(976)
|
|
(62)
|
|
763
|
|
917
|
|
|
|
|
|
|
|
|
|
Total comprehensive
loss
|
|
$
(158,828)
|
|
$
(6,092)
|
|
$
(127,412)
|
|
$
(4,739)
|
(*) Reclassified in respect of discontinued operations.
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
|
AND OTHER
COMPREHENSIVE INCOME
|
Canadian Dollars in
thousands, except per share data
|
|
|
|
|
Nine months
ended
September
30,
|
|
Three months
ended
September
30,
|
|
|
|
2022
|
|
2021
(*)
|
|
2022
|
|
2021
(*)
|
|
|
|
Unaudited
|
Net loss attributable
to:
|
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
|
$
(155,863)
|
|
$ (4,869)
|
|
$ (127,788)
|
|
$ (4,285)
|
Non-controlling
interests
|
|
|
(1,989)
|
|
(1,161)
|
|
(387)
|
|
(1,371)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
(157,852)
|
|
$ (6,030)
|
|
$
(128,175)
|
|
$ (5,656)
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
loss attributable to:
|
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
|
$
(156,754)
|
|
$ (4,933)
|
|
$
(127,069)
|
|
$ (3,359)
|
Non-controlling
interests
|
|
|
(2,074)
|
|
(1,159)
|
|
(343)
|
|
(1,380)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
(158,828)
|
|
$ (6,092)
|
|
$
(127,412)
|
|
$ (4,739)
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
attributable to equity holders of the
Company:
|
|
|
|
|
|
|
|
|
|
Basic loss per share
(in CAD)
|
|
|
$
(2.22)
|
|
$
(0.10)
|
|
$
(1.81)
|
|
$
(0.06)
|
Diluted loss per share
(in CAD)
|
|
|
$
(2.22)
|
|
$
(0.51)
|
|
$
(1.81)
|
|
$
(0.18)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to equity holders
of the Company from continuing operations:
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share (in CAD)
|
|
|
$
(0.19)
|
|
$
0.19
|
|
$
(0.06)
|
|
$
0.03
|
Diluted loss per share
(in CAD)
|
|
|
$
(0.26)
|
|
$
(0.24)
|
|
$
(0.06)
|
|
$
(0.09)
|
|
|
|
|
|
|
|
|
|
|
Loss per share
attributable to equity holders of the
Company from discontinued operations:
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per share (in CAD)
|
|
|
$
(2.03)
|
|
$
(0.29)
|
|
$
(1.75)
|
|
$
(0.1)
|
(*) Reclassified in respect of discontinued operations.
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Canadian Dollars in
thousands
|
|
|
|
Nine months
ended
September
30,
|
|
|
2022
|
|
2021
|
|
|
Unaudited
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
Net loss for the
period
|
|
$ (157,852)
|
|
$ (6,030)
|
|
|
|
|
|
Adjustments for
non-cash items:
|
|
|
|
|
|
|
|
|
|
Unrealized gain on
changes in fair value of biological assets
|
|
(553)
|
|
(5,484)
|
Fair value adjustment
on sale of inventory
|
|
3,816
|
|
7,608
|
Fair value adjustment
of warrants and derivative assets measured at fair
value
|
|
(5,892)
|
|
(21,169)
|
Depreciation of
property, plant and equipment
|
|
2,530
|
|
1,998
|
Amortization of
intangible assets
|
|
1,834
|
|
578
|
Depreciation of
right-of-use assets
|
|
1,504
|
|
1,028
|
Goodwill
impairment
|
|
107,854
|
|
-
|
Impairment of property,
plant and equipment
|
|
2,277
|
|
-
|
Impairment of
intangible assets
|
|
3,067
|
|
-
|
Impairment of
right-of-use assets
|
|
1,914
|
|
-
|
Finance expenses,
net
|
|
6,226
|
|
357
|
Deferred tax benefit,
net
|
|
(1,851)
|
|
(18)
|
Share-based
payment
|
|
3,284
|
|
5,354
|
Share-based acquisition costs related to
business combination
|
|
-
|
|
1,301
|
Non-cash interest
income on loans receivable
|
|
-
|
|
124
|
Revaluation of other
accounts receivable
|
|
4,191
|
|
419
|
Restructuring
expenses
|
|
8,773
|
|
-
|
|
|
|
|
|
|
|
138,974
|
|
(7,904)
|
Changes in working
capital:
|
|
|
|
|
|
|
|
|
|
Decrease (increase) in
trade receivables, net
|
|
1,215
|
|
(7,610)
|
Decrease (increase) in
other accounts receivable and advances to suppliers
|
|
3,419
|
|
(4,521)
|
Decrease in biological
assets, net of fair value adjustments
|
|
522
|
|
3,636
|
Increase in
inventories, net of fair value adjustments
|
|
(641)
|
|
(14,016)
|
Increase in trade
payables
|
|
8,020
|
|
2,994
|
Increase in employee
benefit liabilities, net
|
|
14
|
|
66
|
Decrease in other
accounts payable and accrued expenses
|
|
(3,324)
|
|
(5,144)
|
|
|
|
|
|
|
|
9,225
|
|
(24,595)
|
|
|
|
|
|
Taxes paid
|
|
(470)
|
|
(605)
|
|
|
|
|
|
Net cash used in
operating activities
|
|
(10,123)
|
|
(39,134)
|
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Canadian Dollars in
thousands
|
|
|
|
Nine months
ended
September
30,
|
|
|
2022
|
|
2021
|
|
|
Unaudited
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
$(1,387)
|
|
$(3,187)
|
Proceeds from sales of
property, plant and equipment
|
|
210
|
|
-
|
Proceeds from loan
receivables
|
|
350
|
|
7,796
|
Purchase of intangible
assets
|
|
-
|
|
(5)
|
Acquisition of
businesses, net of cash acquired
|
|
-
|
|
(6,856)
|
Investments in
financial assets
|
|
-
|
|
305
|
Proceeds from
restricted bank deposit
|
|
1
|
|
17
|
|
|
|
|
|
Net cash used in
investing activities
|
|
$(826)
|
|
$
(1,930)
|
|
|
|
|
|
Cash flow from
financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise
of warrants
|
|
-
|
|
3,538
|
Proceeds from exercise
of options
|
|
335
|
|
134
|
Proceeds from issuance
of share capital, net of issuance costs
|
|
3,174
|
|
39,353
|
Repayment of lease
liability
|
|
(1,075)
|
|
(348)
|
Payment of lease
liability interest
|
|
(1,262)
|
|
(913)
|
Proceeds from bank loan
and credit facilities, net
|
|
2,510
|
|
4,174
|
Interest
paid
|
|
(774)
|
|
-
|
|
|
|
|
|
Net cash provided by
financing activities
|
|
2,908
|
|
45,938
|
|
|
|
|
|
Effect of foreign
exchange on cash and cash equivalents
|
|
(1,879)
|
|
3,357
|
|
|
|
|
|
Increase (decrease) in
cash and cash equivalents
|
|
(9,920)
|
|
8,231
|
Cash and cash
equivalents at beginning of the period
|
|
13,903
|
|
8,885
|
|
|
|
|
|
Cash and cash
equivalents at end of the period
|
|
$ 3,983
|
|
$ 17,116
|
|
|
|
|
|
Supplemental disclosure
of non-cash activities:
|
|
|
|
|
|
|
|
|
|
Right-of-use asset
recognized with corresponding lease liability
|
|
$
269
|
|
$
1,599
|
Issuance of shares in
payment of purchase consideration liability
|
|
$ 3,062
|
|
$
-
|
Logo -
https://mma.prnewswire.com/media/1742228/IM_Cannabis_Logo.jpg
View original
content:https://www.prnewswire.com/news-releases/im-cannabis-reports-third-quarter-2022-financial-results-revenues-increased-78-yoy-and-12-sequentially-301676854.html
SOURCE IM Cannabis Corp.