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Akanda (AKAN) - 2023 Q4 - Annual Report
Akanda Akanda (US:AKAN)2023-12-28 16:00

Unaudited Condensed Interim Consolidated Statements of Financial Position The company's financial position shows a decrease in total assets and shareholders' equity, alongside an increase in total liabilities, reflecting changes in current and non-current components Assets Total assets declined to $36,507,556 by June 30, 2023, from $38,996,777, primarily due to reductions in non-current assets and specific current asset categories Total Assets Overview | Category | June 30, 2023 ($) | December 31, 2022 ($) | | :----------------------- | :------------ | :------------------ | | Total Current Assets | $3,245,108 | $3,821,021 | | Total Non-Current Assets | $33,262,448 | $35,175,756 | | Total Assets | $36,507,556 | $38,996,777 | - Cash increased from $228,794 to $443,338, while cash held in trust decreased from $27,009 to $02 - Trade and other receivables decreased significantly from $1,235,619 to $657,5682 - Biological assets decreased from $809,180 to $257,144, and inventory increased from $1,057,240 to $1,280,0732 Liabilities and Shareholders' Equity Total liabilities increased to $14,858,513, while total shareholders' equity decreased to $21,649,043, driven by rising current liabilities and an accumulated deficit Total Liabilities and Shareholders' Equity Overview | Category | June 30, 2023 ($) | December 31, 2022 ($) | | :--------------------------- | :------------ | :------------------ | | Total Current Liabilities | $12,375,919 | $9,347,750 | | Total Non-Current Liabilities | $2,482,594 | $2,748,866 | | Total Liabilities | $14,858,513 | $12,096,616 | | Total Shareholders' Equity | $21,649,043 | $26,900,161 | - Trade and other payables increased from $7,139,817 to $8,460,1942 - Loans and borrowings significantly increased from $936,793 to $2,478,555 in current liabilities2 - Accumulated deficit worsened from $(21,087,962) to $(26,965,844)2 Unaudited Condensed Interim Consolidated Statements of Loss and Comprehensive Loss Despite increased sales and gross profit, the company reported a widened net loss for H1 2023, primarily due to the absence of a significant gain recorded in the prior year Financial Performance For H1 2023, sales and gross profit increased, but a widened net loss of $(5,877,882) resulted from the absence of a prior year's bargain purchase gain Financial Performance Summary | Metric | Six months ended June 30, 2023 ($) | Six months ended June 30, 2022 ($) | | :------------------------------------------------- | :----------------------------- | :----------------------------- | | Sales | $1,397,443 | $73,096 | | Gross Profit | $935,407 | $93,304 | | Operating loss | $(5,821,187) | $(10,918,113) | | Net loss | $(5,877,882) | $(2,593,744) | | Comprehensive loss | $(6,004,877) | $(3,613,242) | | Loss per share – basic and diluted | $(1.46) | $(0.97) | - Sales increased significantly from $73,096 in H1 2022 to $1,397,443 in H1 20233 - Gross Profit increased from $93,304 in H1 2022 to $935,407 in H1 20233 - Operating loss improved from $(10,918,113) in H1 2022 to $(5,821,187) in H1 2023, but net loss worsened due to the absence of a $12,760,356 'Gain on bargain purchase' recorded in H1 20223 Unaudited Condensed Interim Consolidated Statements of Shareholders' Equity Total shareholders' equity decreased significantly, driven by a net loss and translation adjustments, partially mitigated by RSU issuances Equity Changes Total shareholders' equity decreased to $21,649,043 by June 30, 2023, primarily due to a net loss and translation adjustments, partially offset by RSU issuances Shareholders' Equity Summary | Metric | June 30, 2023 ($) | December 31, 2022 ($) | | :------------------------------------ | :------------ | :------------------ | | Share capital | $50,188,451 | $49,434,692 | | Accumulated deficit | $(26,965,844) | $(21,087,962) | | Accumulated other comprehensive loss | $(1,594,617) | $(1,467,622) | | Total Shareholders' Equity | $21,649,043 | $26,900,161 | - Net loss for the six months ended June 30, 2023, was $(5,877,882), contributing to the accumulated deficit4 - Fair value of RSUs issued at $1.84 per share and $1.11 per share contributed $774,736 and $179,037 to share capital, respectively4 Unaudited Condensed Interim Consolidated Statements of Cash Flows Operating cash outflow significantly improved, while financing inflows decreased, resulting in a net increase in cash for the period Cash Flow Activities Operating cash outflow significantly improved to $(911,484), while financing inflows decreased, leading to a net increase in cash of $301,115 for the period Cash Flow Summary | Cash Flow Category | Six months ended June 30, 2023 ($) | Six months ended June 30, 2022 ($) | | :------------------------------------ | :----------------------------- | :----------------------------- | | Cash flows used in operating activities | $(911,484) | $(8,353,721) | | Cash flows used in investing activities | $(1,935) | $(4,231,938) | | Cash flows provided by financing activities | $1,214,534 | $14,642,326 | | Net increase in cash and cash equivalents | $301,115 | $2,056,667 | | Cash and cash equivalents at the end of the period | $443,338 | $4,403,214 | - Operating cash outflow improved significantly from $(8,353,721) in H1 2022 to $(911,484) in H1 2023, despite a higher net loss, due to adjustments for non-cash items and working capital changes6 - Financing cash inflows decreased substantially from $14,642,326 in H1 2022 (driven by IPO proceeds) to $1,214,534 in H1 2023 (primarily from new loans received)6 Notes to the Unaudited Condensed Interim Consolidated Financial Statements These notes provide detailed explanations of the company's accounting policies, financial instrument risks, and significant events affecting its interim financial statements 1. Nature of Operations and Going Concern Akanda Corp. operates in UK cannabis distribution and Portuguese cultivation, facing significant going concern uncertainties due to cash outflows and a working capital deficit - The Company's primary business activities include sales and distribution of cannabis-based products through Canmart Ltd. in the UK and production of EU GMP grade cannabis flower through Holigen Limited in Portugal810 - Bophelo Bio Science and Wellness (Pty) Ltd., a former subsidiary in Lesotho, was placed into insolvent liquidation on July 15, 2022, leading to the derecognition of its assets and liabilities and reclassification of its operating results as a discontinued operation8 Going Concern Metrics | Metric | Value (as of June 30, 2023) ($) | | :-------------------------- | :-------------------------- | | Net cash outflow from operating activities (six months) | $(911,484) | | Working capital deficit | $(9,130,811) | | **Accumulated