IM Cannabis (US:IMCC)2024-11-14 13:33Financial Performance - Total revenues for the nine months ended September 30, 2024, were CAD 40,696 thousand, an increase from CAD 38,106 thousand in the same period of 2023, representing a growth of approximately 4.2%[12] - Gross profit before fair value adjustments decreased to CAD 5,818 thousand for the nine months ended September 30, 2024, compared to CAD 9,715 thousand in 2023, reflecting a decline of about 40.5%[12] - Operating loss for the nine months ended September 30, 2024, was CAD 9,452 thousand, compared to CAD 7,627 thousand in the same period of 2023, indicating an increase in losses of approximately 23.9%[12] - Net loss for the nine months ended September 30, 2024, was CAD 10,558 thousand, compared to CAD 6,708 thousand in 2023, representing an increase in net losses of about 57.5%[12] - The company reported a total comprehensive loss of CAD 9,433 thousand for the nine months ended September 30, 2024, compared to CAD 6,670 thousand in the same period of 2023, indicating an increase of about 41.9%[12] - Net loss attributable to equity holders for the nine months ended September 30, 2024, was CAD (9,574) thousand, compared to CAD (6,209) thousand for the same period in 2023, representing an increase in loss of approximately 54%[13] - Total comprehensive loss attributable to equity holders for the nine months ended September 30, 2024, was CAD (8,458) thousand, compared to CAD (6,152) thousand for the same period in 2023, indicating a 37% increase in comprehensive loss[13] - Basic and diluted loss per share attributable to equity holders for the nine months ended September 30, 2024, was CAD (4.29), compared to CAD (2.95) for the same period in 2023, reflecting a 45% increase in loss per share[13] Assets and Liabilities - Total assets as of September 30, 2024, were CAD 44,635 thousand, a decrease from CAD 48,813 thousand as of December 31, 2023, reflecting a decline of approximately 8.9%[6] - Current liabilities increased to CAD 39,248 thousand as of September 30, 2024, compared to CAD 32,808 thousand as of December 31, 2023, marking an increase of about 19.0%[10] - Total liabilities as of September 30, 2024, were CAD 40,425 thousand, up from CAD 35,113 thousand as of December 31, 2023, indicating an increase of approximately 15.5%[10] - Total equity as of September 30, 2024, was CAD 5,954 thousand, a decrease from CAD 19,167 thousand as of September 30, 2023, reflecting a decline in shareholder equity[21] Cash Flow and Working Capital - Net cash provided by operating activities for the nine months ended September 30, 2024, was CAD 3,122 thousand, compared to a net cash used of CAD (7,857) thousand for the same period in 2023, indicating a significant improvement in cash flow[25] - The current working capital is $(11,605,000), indicating a negative liquidity position[41] Inventory and Expenses - The company reported inventory expensed to cost of goods sold of cannabis products was $32,853 thousand for the nine months ended September 30, 2024, compared to $26,359 thousand for the same period in 2023, reflecting an increase of approximately 24.8%[124] - As of September 30, 2024, the carrying value of total inventory was $4,310 thousand, which includes bulk cannabis valued at $733 thousand and packaged dried cannabis valued at $3,468 thousand[124] - The company recorded a depreciation and amortization expense of $1,642 for the nine months ended September 30, 2024, down from $2,265 in the same period of 2023[142] Corporate Actions and Developments - The Company has implemented a cost-saving plan that includes discontinuing loss-making operations and reducing payroll, which is expected to save costs in 2024[42] - The Company exited its operations in Canada, with the Canadian entities being wound down under CCAA proceedings[48] - The Company signed a convertible loan agreement with Telekana Ltd. for a total of $611,000, which will convert to 51% of shares upon receiving approval from the Israeli Ministry of Health[56] - The Company closed its cultivation facility in Israel, resulting in restructuring expenses of $4,383,000 related to impairment of assets[60] - The Company recorded restructuring expenses of $617,000 related to workforce reductions in Israel, completed by mid-2023[61] - The Company received a notification from Nasdaq regarding non-compliance with the minimum share price requirement, with a deadline to regain compliance by January 16, 2024[70] - The Company regained compliance with Nasdaq's minimum bid price requirement on July 26, 2024[71] Financing and Debt - The Company settled outstanding indebtedness of $838,776 (approximately US$615,615) through issuing 492,492 Units at a price of US$1.25 per Unit[47] - Kadimastem Ltd. will provide a loan of up to $650,000 to IMC, with $300,000 upon signing and $350,000 upon executing the definitive agreement[67] - The loan from Kadimastem accrues 9.00% interest per annum for 12 months and is secured by 10% of proceeds from any operation sale under the CVR[68] - The company has borrowed more than US$8,000,000 since October 2022, with a personal guarantee from the CEO, resulting in a benefit of approximately US$560,000[155] Regulatory and Compliance - The Company was assessed excise tax on insurance totaling $199 for 2020 and $73 for 2021, with objections filed for both assessments[74][75] - The Company announced the termination of the preliminary term sheet with Kadimastem, requiring repayment of a $300,000 loan by July 31, 2024[69] Market and Industry Developments - Germany legalized cannabis on April 1, 2024, which is expected to facilitate access to medical cannabis prescriptions[88]