IM Cannabis (US:IMCC)2024-08-14 12:15Financial Performance - Revenues for the six months ended June 30, 2024, increased to CAD 26,813 thousand, up from CAD 25,736 thousand for the same period in 2023, reflecting a growth of 4.2%[8] - Gross profit before fair value adjustments decreased to CAD 2,648 thousand for the six months ended June 30, 2024, compared to CAD 6,977 thousand in the prior year, a decline of 62.0%[8] - Operating loss increased to CAD 8,499 thousand for the six months ended June 30, 2024, compared to CAD 5,368 thousand in the same period of 2023, an increase of 58.8%[8] - Net loss for the six months ended June 30, 2024, was CAD 9,476 thousand, compared to a net loss of CAD 4,572 thousand for the same period in 2023, indicating an increase of 107.5%[8] - Total comprehensive loss for the six months ended June 30, 2024, was CAD 7,918 thousand, compared to CAD 4,731 thousand for the same period in 2023, an increase of 67.5%[8] - The net loss attributable to equity holders for the six months ended June 30, 2024, was CAD 8,652,000, compared to CAD 4,059,000 for the same period in 2023, representing an increase of 113%[9] - Basic and diluted loss per share for the six months ended June 30, 2024, was CAD 0.65, compared to CAD 0.33 for the same period in 2023, reflecting a 97% increase[9] Assets and Liabilities - Total assets decreased from CAD 48,813 thousand as of December 31, 2023, to CAD 40,216 thousand as of June 30, 2024, representing a decline of approximately 17.7%[2] - Current liabilities rose to CAD 33,403 thousand as of June 30, 2024, from CAD 32,808 thousand as of December 31, 2023, an increase of 1.8%[5] - Total liabilities decreased slightly from CAD 35,113 thousand as of December 31, 2023, to CAD 34,735 thousand as of June 30, 2024, a decrease of 1.1%[5] - The total equity as of June 30, 2024, was CAD 5,481,000, down from CAD 23,797,000 as of January 1, 2023, indicating a decline in equity[11] Cash Flow - Cash provided by operating activities for the six months ended June 30, 2024, was CAD 368,000, a significant improvement from a cash used of CAD 13,212,000 in the same period of 2023[14] - Net cash used in investing activities for the six months ended June 30, 2024, was CAD 398,000, compared to CAD 553,000 for the same period in 2023[16] - Net cash provided by financing activities for the six months ended June 30, 2024, was CAD 643,000, a decrease from CAD 10,677,000 in the same period of 2023[16] - The cash and cash equivalents at the end of the period on June 30, 2024, were CAD 700,000, down from CAD 1,321,000 at the end of June 30, 2023[16] Inventory and Cost of Goods Sold - As of June 30, 2024, total inventory amounted to $5,719 thousand, a decrease from $9,976 thousand as of December 31, 2023, reflecting a reduction of approximately 42.7%[97][98] - During the six months ended June 30, 2024, the cost of goods sold for cannabis products was $22,586 thousand, compared to $17,716 thousand for the same period in 2023, representing an increase of approximately 27.6%[98] Corporate Actions and Strategies - The Company exited its operations in Canada, with the Canadian entities sold for a purchase price of $3,375, resulting in no proceeds to the Company[40] - The Company recorded restructuring expenses of $4,383 related to the closure of the "Sde Avraham" cultivation facility in Israel[45] - A cost-saving plan was approved in 2023, focusing on reducing payroll, headcount, and operational efficiencies to save costs in 2024[29] - The Company announced a strategy plan in Israel to strengthen core activities and drive efficiencies, including workforce reductions completed by mid-2023[46] - A proposed business combination with Kadimastem Ltd. will result in a reverse merger, changing the Company's focus from medical cannabis to biotechnology[47] - The Legacy Business will be available for potential sale for up to 12 months from the closing of the proposed transaction, with proceeds used to settle debts[51] Financing and Debt - IM Cannabis Corp. signed a loan agreement with Kadimastem for up to US$650,000, with a 9% annual interest rate, to be funded in two installments[53][54] - The company announced the termination of the loan agreement with Kadimastem, requiring repayment of US$300,000 plus 9% interest in three installments by July 31, 2024[55] - A short-term loan agreement was entered into on July 1, 2024, for $1,113,000 with an annual interest rate of 12%[127] - The company closed a private placement of secured convertible debentures for aggregate proceeds of $2,092, convertible at $0.85 per share[75] Compliance and Regulatory Matters - Nasdaq notified the company that its share price fell below US$1.00 for 30 consecutive business days, requiring compliance by January 16, 2024[56] - The company received a 180-day extension from Nasdaq until July 29, 2024, to regain compliance with the minimum share price requirement[57] - IM Cannabis Corp. was assessed excise tax totaling CAD 199, with additional penalties, for the years 2020 and 2021, but objections were filed[59][60] Shareholder Information - As of June 30, 2024, the company had 13,394,136 common shares issued and outstanding, unchanged from December 31, 2023[106][112] - The company consolidated its common shares on July 12, 2024, reducing the total from 13,394,136 to 2,232,357 shares[128] - On July 26, 2024, the company received notice from Nasdaq confirming compliance with the minimum bid price requirement[129]