IM Cannabis (IMCC) - 2024 Q4 - Annual Report

Financial Performance - Q4 2024 revenue increased by 25% to $13.3M compared to Q4 2023, with annual revenue growth of 11% to $54.0M[7] - IMC Germany revenue surged by 183% in 2024, totaling $15.5M compared to $5.5M in 2023[7] - Adjusted EBITDA for Q4 2024 was $0.5M, a significant improvement from a loss of $4.3M in Q4 2023, marking an 87% reduction in annual losses to $1.1M from $8.0M[7] - Revenue for the year ended December 31, 2024, was CAD 54,031,000, an increase of 10% compared to CAD 48,804,000 in 2023[18] - Gross profit after fair value adjustments decreased to CAD 8,451,000 in 2024 from CAD 9,846,000 in 2023, representing a decline of 14.1%[18] - The operating loss for 2024 was CAD 10,234,000, an improvement from a loss of CAD 12,792,000 in 2023[18] - Net loss from continuing operations for 2024 was CAD 11,771,000, compared to CAD 10,228,000 in 2023, indicating a 15.1% increase in losses[18] - Total comprehensive loss for 2024 was CAD 13,206,000, compared to CAD 10,853,000 in 2023, reflecting a 21.6% increase in comprehensive losses[19] Expenses and Liabilities - Operating expenses decreased by 42% in Q4 2024 to $3.5M, and by 17% annually to $18.7M from $22.6M in 2023[9] - General and administrative expenses fell by 27% to $8.0M in 2024 from $11.0M in 2023, with a 64% decrease in Q4 expenses[9] - Total operating expenses for 2024 were CAD 18,685,000, down 17.5% from CAD 22,638,000 in 2023[18] - Selling and marketing expenses decreased to CAD 7,069,000 in 2024 from CAD 10,788,000 in 2023, a reduction of 34.1%[18] - Total liabilities increased by 3% to $36.0M as of December 31, 2024, compared to $35.1M in 2023, influenced by the Oranim agreement cancellation[14] Assets and Equity - Total assets decreased by 19.7% to $39.2M as of December 31, 2024, from $48.8M in 2023, largely due to the cancellation of the Oranim deal[14] - As of December 31, 2023, total shareholders' equity was CAD 13,700, a decrease from CAD 23,797 as of January 1, 2023, reflecting a comprehensive loss of CAD 10,853[22] - As of December 31, 2024, total shareholders' equity is projected to be CAD 3,146, reflecting a significant decrease from CAD 13,700[23] Cash Flow - Cash and cash equivalents as of December 31, 2024, were $0.9M, down from $1.8M in 2023[14] - Cash flows used in operating activities for 2023 totaled $1,077 thousand, a significant improvement from $8,075 thousand in 2022, reflecting a decrease in cash outflow of approximately 86.7%[24] - The cash at the end of the year was $863 thousand, down from $1,813 thousand at the end of 2022, reflecting a decline of approximately 52.4%[25] Future Outlook and Strategy - The company anticipates Q1 2024 to be the best quarter in sales to date in Germany, driven by operational efficiencies and inventory clearance[28] - The company is focusing on sustainable and profitable growth in its highest value markets, specifically Israel and Germany, amidst the challenges posed by the Israel-Hamas war[28] - The company aims to improve its EBITDA as operational efficiencies continue to materialize, indicating a focus on financial performance[28] - The Company faces inherent risks and uncertainties that may cause actual results to differ materially from forward-looking statements, including regulatory compliance and market conditions[30] - The Company does not intend to update future-oriented financial information unless required by applicable securities laws, indicating a cautious approach to financial forecasting[35] Risks and Challenges - The Company is unable to amplify its commercial and brand power to become a global high-quality cannabis player, which may hinder its competitive position[31] - The demand and momentum in the Company's Israeli and German operations are expected to be unfavorable, impacting overall performance[31] - The Company may not realize the stated efficiencies and synergies as a global organization, affecting its operational effectiveness[31] - The Company is at risk of not achieving sustainable profitability or increasing shareholder value, which could impact investor confidence[30] - The Company may not be able to take advantage of the partial legalization of medicinal cannabis in Germany, limiting growth opportunities[30]