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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| IM Cannabis Corporation | NASDAQ:IMCC | NASDAQ | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.147 | 4.77% | 3.227 | 3.07 | 3.24 | 3.39 | 3.04 | 3.05 | 44,483 | 19:38:02 |
|
|
IM CANNABIS CORP.
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date: November 14, 2024
|
By:
|
/s/ Oren Shuster
|
|
|
Name:
|
Oren Shuster
|
|
|
Title:
|
Chief Executive Officer and Director
|
| • |
+12% increase in Revenue to $13.9M vs. $12.4M in Q3, 2023. Adjusting for the revocation of the Oranim deal, increases the revenue to + 51% or $4.7M vs Q3, 2023
|
| • |
-41% decrease in Selling & Marketing expenses to $1.5M vs. $2.6M in Q3, 2023
|
| • |
-16% decrease in Total Operating expenses to $4.1M vs. $4.9M in Q3, 2023
|
| • |
-$0.5M EBITDA loss, a decrease of -68% vs. $1.6M in Q3, 2023
|
| • |
-$0.2M adjusted EBITDA loss (Non-IFRS), a decrease of -82% vs. $1.3M in Q3, 2023
|
| • |
+25% improvement in Operational expense ratio to 30% vs. 40% in Q3, 2023
|
| • |
Revenues for the third quarter of 2024 were $13.9 million compared to $12.4 million in Q3 2023, an increase of $1.5 million or
12%. The increase is mainly attributed to accelerated growth in Germany revenue of $4.3 million net and decreased net Revenue in Israel of $2.8 million, which consists of Oranim revenue in Q3 2023. Adjusting for Oranim Revenue of $3.2
million in Q3 2023, result with revenue increase of $4.7M or 51%.
|
| • |
Total Dried Flower sold in Q3 2024 was approximately 2,202 kg with an average selling price of $6.20 per gram, compared to approximately 2,558kg in
Q3 2023, with an average selling price of $4.35 per gram, which is a price increase of 42%.
|
| • |
Cost of revenues for Q3 2024 were $10.7 million compared to $9.6 million in Q3 2023, an increase of $1.1 million or 11%, mainly due to an increase in costs of
approximately $1.2 million including an accrual for slow inventory of $0.6 million, that is offset by decrease in other costs net of approximately $0.1 million.
|
| • |
Gross profit for the third quarter of 2024 was $3.1 million, compared to $2.6 million in Q3 2023, an increase of 19%.
|
| • |
G&A Expenses in Q3 2024 were $2.4 million, compared to $2.1 million in Q3 2023, an increase of $0.3 million or 10%.
|
| • |
Selling and Marketing Expenses in Q3 2024 were $1.5 million, compared to $2.6 million in Q3 2023, a decrease of $1.1 million or 41% mainly due to the revocation of Oranim
agreement of $0.7 million and decrease in salaries and professional services of $0.5 million.
|
| • |
Total operating expenses in Q3 2024 were $4.1 million compared to $4.9 million in Q3 2023, a decrease of $0.8 million or 16%.
|
| • |
Net Loss in Q3 2024 was $1.1 million, compared to $2.1 million in Q3 2023, a decrease loss of $1.0 million or 48%.
|
| • |
Basic and diluted Loss per Share in Q3 2024 was $0.41, compared to a loss of $0.96 per Share in Q3 2023.
|
| • |
Non-IFRS Adjusted EBITDA loss in Q3 2024 was $0.2 million, compared to loss of $1.3 million in Q3 2023 or 82% decrease.
|
| • |
Cash and Cash Equivalents as of September 30, 2024, were $2 million compared to $1.8 million on December 31, 2023.
|
| • |
Total assets as of September 30, 2024, were $44.6 million, compared to $48.8 million on December 31, 2023, a decrease of $4.2 million or 8.6%.
|
| • |
Total Liabilities as of September 30, 2024, were $40.4 million, compared to $35.1 million on December 31, 2023, an increase of $5.3 million or 15%.
|
|
September 30, 2024
|
December 31, 2023
|
|||||||||||
|
Note
|
(Unaudited)
|
(Audited)
|
||||||||||
|
ASSETS
|
||||||||||||
|
CURRENT ASSETS:
|
||||||||||||
|
Cash and cash equivalents
|
$
|
1,958
|
$
|
1,813
|
||||||||
|
Trade receivables
|
14,411
|
7,651
|
||||||||||
|
Advances to suppliers
|
2,843
|
936
|
||||||||||
|
Other accounts receivable
|
4,121
|
3,889
|
||||||||||
|
Inventories
|
3
|
4,310
|
9,976
|
|||||||||
|
27,643
|
24,265
|
|||||||||||
|
NON-CURRENT ASSETS:
|
||||||||||||
|
Property, plant and equipment, net
|
4,112
|
5,058
|
||||||||||
|
Investments in affiliates
|
2,282
|
2,285
|
||||||||||
|
Right-of-use assets, net
|
516
|
1,307
|
||||||||||
|
Intangible assets, net
|
3,453
|
5,803
|
||||||||||
|
Goodwill
|
6,629
|
10,095
|
||||||||||
|
16,992
|
24,548
|
|||||||||||
|
Total assets
|
$
|
44,635
|
$
|
48,813
|
||||||||
|
September 30, 2024
|
December 31, 2023
|
||||||||||
|
Note
|
(Unaudited)
|
(Audited)
|
|||||||||
|
LIABILITIES AND EQUITY
|
|||||||||||
|
CURRENT LIABILITIES:
|
|||||||||||
|
Trade payables
|
$
|
16,567
|
$
|
9,223
|
|||||||
|
Bank loans and credit facilities
|
12,679
|
12,119
|
|||||||||
|
Other accounts payable and accrued expenses
|
7,660
|
6,218
|
|||||||||
|
Accrued purchase consideration liabilities
|
-
|
2,097
|
|||||||||
|
PUT Option liability
|
-
|
2,697
|
|||||||||
|
Convertible debt
|
2,083
|
-
|
|||||||||
|
Current maturities of operating lease liabilities
|
259
|
454
|
|||||||||
|
39,248
|
32,808
|
||||||||||
|
NON-CURRENT LIABILITIES:
|
|||||||||||
|
Warrants measured at fair value
|
4
|
13
|
38
|
||||||||
|
Operating lease liabilities
|
233
|
815
|
|||||||||
|
Long-term loans
|
405
|
394
|
|||||||||
|
Employee benefit liabilities, net
|
24
|
95
|
|||||||||
|
Deferred tax liability, net
|
502
|
963
|
|||||||||
|
1,177
|
2,305
|
||||||||||
|
Total liabilities
|
40,425
|
35,113
|
|||||||||
|
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE
COMPANY:
|
5
|
||||||||||
|
Share capital and premium
|
256,685
|
253,882
|
|||||||||
|
Translation reserve
|
1,144
|
95
|
|||||||||
|
Reserve from share-based payment transactions
|
7,198
|
9,637
|
|||||||||
|
Conversion option for convertible debt
|
327
|
-
|
|||||||||
|
Accumulated deficit
|
(259,400
|
)
|
(249,145
|
)
|
|||||||
|
Total equity attributable to equity holders of the Company
|
5,954
|
14,469
|
|||||||||
|
Non-controlling interests
|
(1,744
|
)
|
(769
|
)
|
|||||||
|
Total equity
|
4,210
|
13,700
|
|||||||||
|
Total liabilities and equity
|
$
|
44,635
|
$
|
48,813
|
|||||||
|
Nine months ended
September 30,
|
Three months ended
September 30,
|
|||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
|||||||||||||
|
(Unaudited)
|
||||||||||||||||
|
Revenues
|
$
|
40,696
|
$
|
38,106
|
$
|
13,883
|
$
|
12,370
|
||||||||
|
Cost of revenues
|
34,878
|
28,391
|
10,713
|
9,632
|
||||||||||||
|
Gross profit before fair value adjustments
|
5,818
|
9,715
|
3,170
|
2,738
|
||||||||||||
|
Fair value adjustments:
|
||||||||||||||||
|
Realized fair value adjustments on inventory sold in the period
|
(47
|
)
|
(710
|
)
|
(22
|
)
|
(93
|
)
|
||||||||
|
Total fair value adjustments
|
(47
|
)
|
(710
|
)
|
(22
|
)
|
(93
|
)
|
||||||||
|
Gross profit
|
5,771
|
9,005
|
3,148
|
2,645
|
||||||||||||
|
General and administrative expenses
|
6,846
|
7,708
|
2,351
|
2,145
|
||||||||||||
|
Selling and marketing expenses
|
5,279
|
7,991
|
1,506
|
2,564
|
||||||||||||
|
Restructuring expenses
|
-
|
617
|
-
|
-
|
||||||||||||
|
Share-based compensation
|
364
|
316
|
244
|
195
|
||||||||||||
|
Loss on deconsolidation
|
2,734
|
-
|
-
|
-
|
||||||||||||
|
Total operating expenses
|
15,223
|
16,632
|
4,101
|
4,904
|
||||||||||||
|
Operating loss
|
9,452
|
7,627
|
953
|
2,259
|
||||||||||||
|
Finance income (expense), net
|
(2,082
|
)
|
869
|
(155
|
)
|
248
|
||||||||||
|
Loss before income taxes
|
11,534
|
6,758
|
1,108
|
2,011
|
||||||||||||
|
Tax income (expense)
|
976
|
50
|
26
|
(125
|
)
|
|||||||||||
|
Net loss
|
(10,558
|
)
|
(6,708
|
)
|
(1,082
|
)
|
(2,136
|
)
|
||||||||
|
Other comprehensive income (loss) that will not be reclassified to profit or loss in subsequent periods:
|
||||||||||||||||
|
Remeasurement gain on defined benefit plan
|
67
|
36
|
-
|
-
|
||||||||||||
|
Exchange differences on translation to presentation currency
|
1,566
|
(622
|
)
|
49
|
39
|
|||||||||||
|
Total other comprehensive income (loss) that will not be reclassified to profit or loss in subsequent periods
|
1,633
|
(586
|
)
|
49
|
39
|
|||||||||||
|
Other comprehensive income (loss) that will be reclassified to profit or loss in subsequent periods:
|
||||||||||||||||
|
Adjustments arising from translating financial statements of foreign operation
|
(508
|
)
|
624
|
(482
|
)
|
158
|
||||||||||
|
Total other comprehensive income (loss) that will be reclassified to profit or loss in subsequent periods:
|
(508
|
)
|
624
|
(482
|
)
|
158
|
||||||||||
|
Total other comprehensive income (loss)
|
1,125
|
38
|
(433
|
)
|
197
|
|||||||||||
|
Total comprehensive loss
|
$
|
(9,433
|
)
|
$
|
(6,670
|
)
|
$
|
(1,515
|
)
|
$
|
(1,939
|
)
|
||||
|
Nine months ended
September 30,
|
Three months ended
September 30,
|
||||||||||||||||||
|
2024
|
2023
|
*)
|
2024
|
2023
|
*)
|
||||||||||||||
|
Note
|
(Unaudited)
|
||||||||||||||||||
|
Net income (loss) attributable to:
|
|||||||||||||||||||
|
Equity holders of the Company
|
$
|
(9,574
|
)
|
$
|
(6,209
|
)
|
$
|
(922
|
)
|
$
|
(2,150
|
)
|
|||||||
|
Non-controlling interests
|
(984
|
)
|
(499
|
)
|
(160
|
)
|
14
|
||||||||||||
|
$
|
(10,558
|
)
|
$
|
(6,708
|
)
|
$
|
(1,082
|
)
|
$
|
(2,136
|
)
|
||||||||
|
Total comprehensive income (loss) attributable to:
|
|||||||||||||||||||
|
Equity holders of the Company
|
$
|
(8,458
|
)
|
$
|
(6,152
|
)
|
$
|
(1,357
|
)
|
$
|
(1,943
|
)
|
|||||||
|
Non-controlling interests
|
(975
|
)
|
(518
|
)
|
(158
|
)
|
4
|
||||||||||||
|
$
|
(9,433
|
)
|
$
|
(6,670
|
)
|
$
|
(1,515
|
)
|
$
|
(1,939
|
)
|
||||||||
|
Net income (loss) per share attributable to equity holders of the Company:
|
7
|
||||||||||||||||||
|
Basic loss per share (in CAD)
|
$
|
(4.29
|
)
|
$
|
(2.95
|
)
|
$
|
(0.41
|
)
|
$
|
(0.96
|
)
|
|||||||
|
Diluted loss per share (in CAD)
|
$
|
(4.29
|
)
|
$
|
(2.95
|
)
|
$
|
(0.41
|
)
|
$
|
(0.96
|
)
|
|||||||
|
Earnings (loss) per share attributable to equity holders of the Company:
|
|||||||||||||||||||
|
Basic loss per share (in CAD)
|
$
|
(4.29
|
)
|
$
|
(2.95
|
)
|
$
|
(0.41
|
)
|
$
|
(0.96
|
)
|
|||||||
|
Diluted loss per share (in CAD)
|
$
|
(4.29
|
)
|
$
|
(2.95
|
)
|
$
|
(0.41
|
)
|
$
|
(0.96
|
)
|
|||||||
|
Share
Capital and premium
|
Reserve from share-based payment transactions
|
Conversion option for convertible debt
|
Translation reserve
|
Accumulated deficit
|
Total
|
Non-controlling interests
|
Total
equity
|
|||||||||||||||||||||||||
|
Balance as of January 1, 2024
|
$
|
253,882
|
$
|
9,637
|
$
|
-
|
$
|
95
|
$
|
(249,145
|
)
|
$
|
14,469
|
$
|
(769
|
)
|
$
|
13,700
|
||||||||||||||
|
Net loss
|
-
|
-
|
-
|
-
|
(9,574
|
)
|
(9,574
|
)
|
(984
|
)
|
(10,558
|
)
|
||||||||||||||||||||
|
Total other comprehensive income
|
-
|
-
|
-
|
1,049
|
67
|
1,116
|
9
|
1,125
|
||||||||||||||||||||||||
|
Total comprehensive income (loss)
|
-
|
-
|
-
|
1,049
|
(9,507
|
)
|
(8,458
|
)
|
(975
|
)
|
(9,433
|
)
|
||||||||||||||||||||
|
Net proceeds of convertible debt allocated to conversion option
|
-
|
-
|
327
|
-
|
-
|
327
|
-
|
327
|
||||||||||||||||||||||||
|
Other comprehensive loss Classification
|
-
|
-
|
-
|
-
|
(748
|
)
|
(748
|
)
|
-
|
(748
|
)
|
|||||||||||||||||||||
|
Share-based compensation
|
-
|
364
|
-
|
-
|
-
|
364
|
-
|
364
|
||||||||||||||||||||||||
|
Forfeited options
|
2,803
|
(2,803
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
|
Balance as of September 30, 2024
|
$
|
256,685
|
$
|
7,198
|
$
|
327
|
$
|
1,144
|
$
|
(259,400
|
)
|
$
|
5,954
|
$
|
(1,744
|
)
|
$
|
4,210
|
||||||||||||||
|
Share
Capital and premium
|
Reserve from share-based payment transactions
|
Translation reserve
|
Accumulated deficit
|
Total
|
Non-controlling
interests
|
Total
equity
|
||||||||||||||||||||||
|
Balance as of January 1, 2023
|
$
|
245,776
|
$
|
15,167
|
$
|
1,283
|
$
|
(239,574
|
)
|
$
|
22,652
|
$
|
1,145
|
$
|
23,797
|
|||||||||||||
|
Net loss
|
-
|
-
|
-
|
(6,209
|
)
|
(6,209
|
)
|
(499
|
)
|
(6,708
|
)
|
|||||||||||||||||
|
Total other comprehensive income (loss)
|
-
|
-
|
21
|
36
|
57
|
(19
|
)
|
38
|
||||||||||||||||||||
|
Total comprehensive income (loss)
|
-
|
-
|
21
|
(6,173
|
)
|
(6,152
|
)
|
(518
|
)
|
(6,670
|
)
|
|||||||||||||||||
|
Issuance of common shares
|
2,351
|
-
|
-
|
-
|
2,351
|
-
|
2,351
|
|||||||||||||||||||||
|
Share-based compensation
|
-
|
316
|
-
|
-
|
316
|
-
|
316
|
|||||||||||||||||||||
|
Forfeited options
|
3,028
|
(3,028
|
)
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
|
Balance as of September 30, 2023
|
$
|
251,155
|
$
|
12,455
|
$
|
1,304
|
$
|
(245,747
|
)
|
$
|
19,167
|
$
|
627
|
$
|
19,794
|
|||||||||||||
|
Nine months ended
September 30,
|
||||||||
|
2024
|
2023
|
|||||||
|
Cash provided by operating activities:
|
||||||||
|
Net loss for the period
|
$
|
(10,558
|
)
|
$
|
(6,708
|
)
|
||
|
Adjustments for non-cash items:
|
||||||||
|
Fair value adjustment on sale of inventory
|
47
|
710
|
||||||
|
Fair value adjustment on Warrants, investments and accounts receivable
|
(24
|
)
|
(4,547
|
)
|
||||
|
Interest recorded in respect of the convertible debt
|
197
|
-
|
||||||
|
Depreciation of property, plant and equipment
|
332
|
494
|
||||||
|
Amortization of intangible assets
|
1,036
|
1,329
|
||||||
|
Depreciation of right-of-use assets
|
274
|
442
|
||||||
|
Impairment of PPE
|
10
|
-
|
||||||
|
Finance expenses, net
|
1,911
|
3,678
|
||||||
|
Deferred tax liability, net
|
(138
|
)
|
(200
|
)
|
||||
|
Share-based payment
|
364
|
316
|
||||||
|
Loss from deconsolidation of subsidiary
|
2,764
|
-
|
||||||
|
Net proceeds of convertible debt allocated to conversion option
|
327
|
-
|
||||||
|
7,100
|
2,222
|
|||||||
|
Changes in working capital:
|
||||||||
|
Increase in trade receivables
|
(8,184
|
)
|
(2,719
|
)
|
||||
|
Increase in other accounts receivable and advances to suppliers
|
(2,775
|
)
|
(353
|
)
|
||||
|
Decrease in inventories, net of fair value adjustments
|
4,817
|
4,844
|
||||||
|
Decrease (increase) in trade payables
|
10,595
|
(4,652
|
)
|
|||||
|
Changes in employee benefit liabilities, net
|
(71
|
)
|
(204
|
)
|
||||
|
Increase in other accounts payable and accrued expenses
|
2,420
|
265
|
||||||
|
6,802
|
(2,819
|
)
|
||||||
|
Taxes paid
|
(222
|
)
|
(552
|
)
|
||||
|
Net cash provided (used) in operating activities
|
3,122
|
(7,857
|
)
|
|||||
|
Cash flows from investing activities:
|
||||||||
|
Purchase of property, plant and equipment
|
(126
|
)
|
(553
|
)
|
||||
|
Deconsolidation of subsidiary
|
(346
|
)
|
-
|
|||||
|
Net cash used in investing activities
|
$
|
(472
|
)
|
$
|
(553
|
)
|
||
|
Nine months ended
September 30,
|
||||||||
|
2024
|
2023
|
|||||||
|
Cash flow from financing activities:
|
||||||||
|
Proceeds from issuance of share capital, net of issuance costs
|
$
|
-
|
$
|
1,688
|
||||
|
Proceeds from issuance of warrants
|
-
|
6,585
|
||||||
|
Repayment of lease liability
|
(265
|
)
|
(435
|
)
|
||||
|
Interest paid - lease liability
|
(44
|
)
|
(44
|
)
|
||||
|
Repayment of bank loan and credit facilities
|
(2,624
|
)
|
(1,109
|
)
|
||||
|
Cash paid for interest
|
(1,572
|
)
|
(163
|
)
|
||||
|
Proceeds from discounted checks
|
4,483
|
2,932
|
||||||
|
Net cash provided (used) by financing activities
|
(22
|
)
|
9,454
|
|||||
|
Effect of foreign exchange on cash and cash equivalents
|
(2,483
|
)
|
(2,189
|
)
|
||||
|
Increase (decrease) in cash and cash equivalents
|
145
|
(1,145
|
)
|
|||||
|
Cash and cash equivalents at the beginning of the period
|
1,813
|
2,449
|
||||||
|
Cash and cash equivalents at end of the period
|
$
|
1,958
|
$
|
1,304
|
||||
|
Supplemental disclosure of non-cash activities:
|
||||||||
|
Right-of-use asset recognized with corresponding lease liability
|
$
|
40
|
$
|
49
|
||||
|
Issuance of shares in payment of debt settlement to a non-independent director of the company
|
$
|
-
|
$
|
1,061
|
||||
|
Page
|
||
|
2 - 3
|
||
|
4 - 5
|
||
|
6
|
||
|
7 - 8
|
||
|
9 - 30
|
|
September 30, 2024
|
December 31, 2023
|
||||||||||
|
Note
|
(Unaudited)
|
(Audited)
|
|||||||||
|
ASSETS
|
|||||||||||
|
CURRENT ASSETS:
|
|||||||||||
|
Cash and cash equivalents
|
$
|
1,958
|
$
|
1,813
|
|||||||
|
Trade receivables
|
14,411
|
7,651
|
|||||||||
|
Advances to suppliers
|
2,843
|
936
|
|||||||||
|
Other accounts receivable
|
4,121
|
3,889
|
|||||||||
|
Inventories
|
3
|
4,310
|
9,976
|
||||||||
|
27,643
|
24,265
|
||||||||||
|
NON-CURRENT ASSETS:
|
|||||||||||
|
Property, plant and equipment, net
|
4,112
|
5,058
|
|||||||||
|
Investments in affiliates
|
2,282
|
2,285
|
|||||||||
|
Right-of-use assets, net
|
516
|
1,307
|
|||||||||
|
Intangible assets, net
|
3,453
|
5,803
|
|||||||||
|
Goodwill
|
6,629
|
10,095
|
|||||||||
|
16,992
|
24,548
|
||||||||||
|
Total assets
|
$
|
44,635
|
$
|
48,813
|
|||||||
|
September 30, 2024
|
December 31, 2023
|
||||||||||
|
Note
|
(Unaudited)
|
(Audited)
|
|||||||||
|
LIABILITIES AND EQUITY
|
|||||||||||
|
CURRENT LIABILITIES:
|
|||||||||||
|
Trade payables
|
$
|
16,567
|
$
|
9,223
|
|||||||
|
Bank loans and credit facilities
|
12,679
|
12,119
|
|||||||||
|
Other accounts payable and accrued expenses
|
7,660
|
6,218
|
|||||||||
|
Accrued purchase consideration liabilities
|
-
|
2,097
|
|||||||||
|
PUT Option liability
|
-
|
2,697
|
|||||||||
|
Convertible debt
|
2,083
|
-
|
|||||||||
|
Current maturities of operating lease liabilities
|
259
|
454
|
|||||||||
|
39,248
|
32,808
|
||||||||||
|
NON-CURRENT LIABILITIES:
|
|||||||||||
|
Warrants measured at fair value
|
4
|
13
|
38
|
||||||||
|
Operating lease liabilities
|
233
|
815
|
|||||||||
|
Long-term loans
|
405
|
394
|
|||||||||
|
Employee benefit liabilities, net
|
24
|
95
|
|||||||||
|
Deferred tax liability, net
|
502
|
963
|
|||||||||
|
1,177
|
2,305
|
||||||||||
|
Total liabilities
|
40,425
|
35,113
|
|||||||||
|
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY:
|
5
|
||||||||||
|
Share capital and premium
|
256,685
|
253,882
|
|||||||||
|
Translation reserve
|
1,144
|
95
|
|||||||||
|
Reserve from share-based payment transactions
|
7,198
|
9,637
|
|||||||||
|
Conversion option for convertible debt
|
327
|
-
|
|||||||||
|
Accumulated deficit
|
(259,400
|
)
|
(249,145
|
)
|
|||||||
|
Total equity attributable to equity holders of the Company
|
5,954
|
14,469
|
|||||||||
|
Non-controlling interests
|
(1,744
|
)
|
(769
|
)
|
|||||||
|
Total equity
|
4,210
|
13,700
|
|||||||||
|
Total liabilities and equity
|
$
|
44,635
|
$
|
48,813
|
|||||||
|
Nine months ended
September 30,
|
Three months ended
September 30,
|
|||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
|||||||||||||
|
(Unaudited)
|
||||||||||||||||
|
Revenues
|
$
|
40,696
|
$
|
38,106
|
$
|
13,883
|
$
|
12,370
|
||||||||
|
Cost of revenues
|
34,878
|
28,391
|
10,713
|
9,632
|
||||||||||||
|
Gross profit before fair value adjustments
|
5,818
|
9,715
|
3,170
|
2,738
|
||||||||||||
|
Fair value adjustments:
|
||||||||||||||||
|
Realized fair value adjustments on inventory sold in the period
|
(47
|
)
|
(710
|
)
|
(22
|
)
|
(93
|
)
|
||||||||
|
Total fair value adjustments
|
(47
|
)
|
(710
|
)
|
(22
|
)
|
(93
|
)
|
||||||||
|
Gross profit
|
5,771
|
9,005
|
3,148
|
2,645
|
||||||||||||
|
General and administrative expenses
|
6,846
|
7,708
|
2,351
|
2,145
|
||||||||||||
|
Selling and marketing expenses
|
5,279
|
7,991
|
1,506
|
2,564
|
||||||||||||
|
Restructuring expenses
|
-
|
617
|
-
|
-
|
||||||||||||
|
Share-based compensation
|
364
|
316
|
244
|
195
|
||||||||||||
|
Loss on deconsolidation
|
2,734
|
-
|
-
|
-
|
||||||||||||
|
Total operating expenses
|
15,223
|
16,632
|
4,101
|
4,904
|
||||||||||||
|
Operating loss
|
9,452
|
7,627
|
953
|
2,259
|
||||||||||||
|
Finance income (expense), net
|
(2,082
|
)
|
869
|
(155
|
)
|
248
|
||||||||||
|
Loss before income taxes
|
11,534
|
6,758
|
1,108
|
2,011
|
||||||||||||
|
Tax income (expense)
|
976
|
50
|
26
|
(125
|
)
|
|||||||||||
|
Net loss
|
(10,558
|
)
|
(6,708
|
)
|
(1,082
|
)
|
(2,136
|
)
|
||||||||
|
Other comprehensive income (loss) that will not be reclassified to profit or loss in subsequent periods:
|
||||||||||||||||
|
Remeasurement gain on defined benefit plan
|
67
|
36
|
-
|
-
|
||||||||||||
|
Exchange differences on translation to presentation currency
|
1,566
|
(622
|
)
|
49
|
39
|
|||||||||||
|
Total other comprehensive income (loss) that will not be reclassified to profit or loss in subsequent periods
|
1,633
|
(586
|
)
|
49
|
39
|
|||||||||||
|
Other comprehensive income (loss) that will be reclassified to profit or loss in subsequent periods:
|
||||||||||||||||
|
Adjustments arising from translating financial statements of foreign operation
|
(508
|
)
|
624
|
(482
|
)
|
158
|
||||||||||
|
Total other comprehensive income (loss) that will be reclassified to profit or loss in subsequent periods:
|
(508
|
)
|
624
|
(482
|
)
|
158
|
||||||||||
|
Total other comprehensive income (loss)
|
1,125
|
38
|
(433
|
)
|
197
|
|||||||||||
|
Total comprehensive loss
|
$
|
(9,433
|
)
|
$
|
(6,670
|
)
|
$
|
(1,515
|
)
|
$
|
(1,939
|
)
|
||||
|
Nine months ended
September 30,
|
Three months ended
September 30,
|
||||||||||||||||||
|
2024
|
2023*)
|
|
2024
|
2023*)
|
|
||||||||||||||
|
Note
|
(Unaudited)
|
||||||||||||||||||
|
Net income (loss) attributable to:
|
|||||||||||||||||||
|
Equity holders of the Company
|
$
|
(9,574
|
)
|
$
|
(6,209
|
)
|
$
|
(922
|
)
|
$
|
(2,150
|
)
|
|||||||
|
Non-controlling interests
|
(984
|
)
|
(499
|
)
|
(160
|
)
|
14
|
||||||||||||
|
$
|
(10,558
|
)
|
$
|
(6,708
|
)
|
$
|
(1,082
|
)
|
$
|
(2,136
|
)
|
||||||||
|
Total comprehensive income (loss) attributable to:
|
|||||||||||||||||||
|
Equity holders of the Company
|
$
|
(8,458
|
)
|
$
|
(6,152
|
)
|
$
|
(1,357
|
)
|
$
|
(1,943
|
)
|
|||||||
|
Non-controlling interests
|
(975
|
)
|
(518
|
)
|
(158
|
)
|
4
|
||||||||||||
|
$
|
(9,433
|
)
|
$
|
(6,670
|
)
|
$
|
(1,515
|
)
|
$
|
(1,939
|
)
|
||||||||
|
Net income (loss) per share attributable to equity holders of the Company:
|
7
|
||||||||||||||||||
|
Basic loss per share (in CAD)
|
$
|
(4.29
|
)
|
$
|
(2.95
|
)
|
$
|
(0.41
|
)
|
$
|
(0.96
|
)
|
|||||||
|
Diluted loss per share (in CAD)
|
$
|
(4.29
|
)
|
$
|
(2.95
|
)
|
$
|
(0.41
|
)
|
$
|
(0.96
|
)
|
|||||||
|
Earnings (loss) per share attributable to equity holders of the Company:
|
|||||||||||||||||||
|
Basic loss per share (in CAD)
|
$
|
(4.29
|
)
|
$
|
(2.95
|
)
|
$
|
(0.41
|
)
|
$
|
(0.96
|
)
|
|||||||
|
Diluted loss per share (in CAD)
|
$
|
(4.29
|
)
|
$
|
(2.95
|
)
|
$
|
(0.41
|
)
|
$
|
(0.96
|
)
|
|||||||
|
Share
Capital and
premium
|
Reserve from
share-based
payment
transactions
|
Conversion option for convertible debt
|
Translation
reserve
|
Accumulated
deficit
|
Total
|
Non-controlling interests
|
Total
equity
|
|||||||||||||||||||||||||
|
Balance as of January 1, 2024
|
$
|
253,882
|
$
|
9,637
|
$
|
-
|
$
|
95
|
$
|
(249,145
|
)
|
$
|
14,469
|
$
|
(769
|
)
|
$
|
13,700
|
||||||||||||||
|
Net loss
|
-
|
-
|
-
|
-
|
(9,574
|
)
|
(9,574
|
)
|
(984
|
)
|
(10,558
|
)
|
||||||||||||||||||||
|
Total other comprehensive income
|
-
|
-
|
-
|
1,049
|
67
|
1,116
|
9
|
1,125
|
||||||||||||||||||||||||
|
Total comprehensive income (loss)
|
-
|
-
|
-
|
1,049
|
(9,507
|
)
|
(8,458
|
)
|
(975
|
)
|
(9,433
|
)
|
||||||||||||||||||||
|
Net proceeds of convertible debt allocated to conversion option
|
-
|
-
|
327
|
-
|
-
|
327
|
-
|
327
|
||||||||||||||||||||||||
|
Other comprehensive loss Classification
|
-
|
-
|
-
|
-
|
(748
|
)
|
(748
|
)
|
-
|
(748
|
)
|
|||||||||||||||||||||
|
Share-based compensation
|
-
|
364
|
-
|
-
|
-
|
364
|
-
|
364
|
||||||||||||||||||||||||
|
Forfeited options
|
2,803
|
(2,803
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
|
Balance as of September 30, 2024
|
$
|
256,685
|
$
|
7,198
|
$
|
327
|
$
|
1,144
|
$
|
(259,400
|
)
|
$
|
5,954
|
$
|
(1,744
|
)
|
$
|
4,210
|
||||||||||||||
|
Share
Capital and
premium
|
Reserve from
share-based
payment
transactions
|
Translation
reserve
|
Accumulated
deficit
|
Total
|
Non-controlling interests
|
Total
equity
|
||||||||||||||||||||||
|
Balance as of January 1, 2023
|
$
|
245,776
|
$
|
15,167
|
$
|
1,283
|
$
|
(239,574
|
)
|
$
|
22,652
|
$
|
1,145
|
$
|
23,797
|
|||||||||||||
|
Net loss
|
-
|
-
|
-
|
(6,209
|
)
|
(6,209
|
)
|
(499
|
)
|
(6,708
|
)
|
|||||||||||||||||
|
Total other comprehensive income (loss)
|
-
|
-
|
21
|
36
|
57
|
(19
|
)
|
38
|
||||||||||||||||||||
|
Total comprehensive income (loss)
|
-
|
-
|
21
|
(6,173
|
)
|
(6,152
|
)
|
(518
|
)
|
(6,670
|
)
|
|||||||||||||||||
|
Issuance of common shares
|
2,351
|
-
|
-
|
-
|
2,351
|
-
|
2,351
|
|||||||||||||||||||||
|
Share-based compensation
|
-
|
316
|
-
|
-
|
316
|
-
|
316
|
|||||||||||||||||||||
|
Forfeited options
|
3,028
|
(3,028
|
)
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
|
Balance as of September 30, 2023
|
$
|
251,155
|
$
|
12,455
|
$
|
1,304
|
$
|
(245,747
|
)
|
$
|
19,167
|
$
|
627
|
$
|
19,794
|
|||||||||||||
|
Nine months ended
September 30,
|
||||||||
|
2024
|
2023
|
|||||||
|
Cash provided by operating activities:
|
||||||||
|
Net loss for the period
|
$
|
(10,558
|
)
|
$
|
(6,708
|
)
|
||
|
Adjustments for non-cash items:
|
||||||||
|
Fair value adjustment on sale of inventory
|
47
|
710
|
||||||
|
Fair value adjustment on Warrants, investments and accounts receivable
|
(24
|
)
|
(4,547
|
)
|
||||
|
Interest recorded in respect of the convertible debt
|
197
|
-
|
||||||
|
Depreciation of property, plant and equipment
|
332
|
494
|
||||||
|
Amortization of intangible assets
|
1,036
|
1,329
|
||||||
|
Depreciation of right-of-use assets
|
274
|
442
|
||||||
|
Impairment of PPE
|
10
|
-
|
||||||
|
Finance expenses, net
|
1,911
|
3,678
|
||||||
|
Deferred tax liability, net
|
(138
|
)
|
(200
|
)
|
||||
|
Share-based payment
|
364
|
316
|
||||||
|
Loss from deconsolidation of subsidiary
|
2,764
|
-
|
||||||
|
Net proceeds of convertible debt allocated to conversion option
|
327
|
-
|
||||||
|
7,100
|
2,222
|
|||||||
|
Changes in working capital:
|
||||||||
|
Increase in trade receivables
|
(8,184
|
)
|
(2,719
|
)
|
||||
|
Increase in other accounts receivable and advances to suppliers
|
(2,775
|
)
|
(353
|
)
|
||||
|
Decrease in inventories, net of fair value adjustments
|
4,817
|
4,844
|
||||||
|
Decrease (increase) in trade payables
|
10,595
|
(4,652
|
)
|
|||||
|
Changes in employee benefit liabilities, net
|
(71
|
)
|
(204
|
)
|
||||
|
Increase in other accounts payable and accrued expenses
|
2,420
|
265
|
||||||
|
6,802
|
(2,819
|
)
|
||||||
|
Taxes paid
|
(222
|
)
|
(552
|
)
|
||||
|
Net cash provided (used) in operating activities
|
3,122
|
(7,857
|
)
|
|||||
|
Cash flows from investing activities:
|
||||||||
|
Purchase of property, plant and equipment
|
(126
|
)
|
(553
|
)
|
||||
|
Deconsolidation of subsidiary
|
(346
|
)
|
-
|
|||||
|
Net cash used in investing activities
|
$
|
(472
|
)
|
$
|
(553
|
)
|
||
|
Nine months ended
September 30,
|
||||||||
|
2024
|
2023
|
|||||||
|
Cash flow from financing activities:
|
||||||||
|
Proceeds from issuance of share capital, net of issuance costs
|
$
|
-
|
$
|
1,688
|
||||
|
Proceeds from issuance of warrants
|
-
|
6,585
|
||||||
|
Repayment of lease liability
|
(265
|
)
|
(435
|
)
|
||||
|
Interest paid - lease liability
|
(44
|
)
|
(44
|
)
|
||||
|
Repayment of bank loan and credit facilities
|
(2,624
|
)
|
(1,109
|
)
|
||||
|
Cash paid for interest
|
(1,572
|
)
|
(163
|
)
|
||||
|
Proceeds from discounted checks
|
4,483
|
2,932
|
||||||
|
Net cash provided (used) by financing activities
|
(22
|
)
|
9,454
|
|||||
|
Effect of foreign exchange on cash and cash equivalents
|
(2,483
|
)
|
(2,189
|
)
|
||||
|
Increase (decrease) in cash and cash equivalents
|
145
|
(1,145
|
)
|
|||||
|
Cash and cash equivalents at the beginning of the period
|
1,813
|
2,449
|
||||||
|
Cash and cash equivalents at end of the period
|
$
|
1,958
|
$
|
1,304
|
||||
|
Supplemental disclosure of non-cash activities:
|
||||||||
|
Right-of-use asset recognized with corresponding lease liability
|
$
|
40
|
$
|
49
|
||||
|
Issuance of shares in payment of debt settlement to a non-independent director of the company
|
$
|
-
|
$
|
1,061
|
||||
| NOTE 1:- |
GENERAL
|
| a. |
Corporate information:
|
| NOTE 1:- |
GENERAL (Cont.)
|
| NOTE 1:- |
GENERAL (Cont.)
|
| NOTE 1:- |
GENERAL (Cont.)
|
| NOTE 1:- |
GENERAL (Cont.)
|
| NOTE 1:- |
GENERAL (Cont.)
|
| NOTE 1:- | GENERAL (Cont.) |
| NOTE 1:- |
GENERAL (Cont.)
|
| a. |
On April 17, 2024, one of the Company fully owned subsidiaries entered into a loan agreement with a non-financial institute in the amount of approximately $1,095. Such loan bear interest at an annual rate of 15% and mature 12 months from
the date of issuance.
|
| b. |
On April 17, 2024, IMC Holdings signed an amendment to extend the loan agreement with a non- financial institute from April 18, 2024, to April 18, 2025, of approximately $660, with an annual interest rate of 17% with no additional fees
associated.
|
| NOTE 1:- |
GENERAL (Cont.)
|
| c. |
On July 1st, 2024, IMC Holdings entered into a short-term loan agreement with a non-financial institute in the amount of NIS 3,000 thousand (approximately $1,113). with an annual interest rate of 12%, for a period of 5 months.
|
| d. |
On August 1st, 2024, the credit line of approximately $1,850 CAD related to a financial institution, was converted into a six-month short-term loan, bearing an annual variable interest rate of P+1.9% (with the Israel Prime interest rate as
of the submission date being 6%).
|
| NOTE 1:- |
GENERAL (Cont.)
|
| b. |
Approval of consolidated financial statements:
|
| c. |
Definitions:
|
|
The Company, or IMCC
|
-
|
IM Cannabis Corp.
|
|
The Group
|
-
|
IM Cannabis Corp., its Subsidiaries
|
|
Subsidiaries
|
-
|
Companies that are controlled by the Company (as defined in IFRS 10) and whose accounts are consolidated with those of the Company
|
|
CAD or $
|
-
|
Canadian Dollar
|
|
NIS
|
-
|
New Israeli Shekel
|
| NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES
|
| a. |
Basis of Presentation and Measurement:
|
| 1. |
Amendments to IAS 1,"Non-Current liabilities with Covenants and Classification of Liabilities as current or non-current":
|
| 2. |
Amendment to IFRS 16, "LEASES":
|
| NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
| 3. |
Amendments to IAS 7 and IFRS 7, "Statement of Cash Flows", and IFRS 7, "Financial Instruments: Disclosures":
|
| 4. |
IFRS 18, "Presentation and Disclosure in Financial Statements":
|
| NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
| b. |
Significant Accounting Judgements and Estimates:
|
| NOTE 3:- |
INVENTORIES
|
|
September 30, 2024
|
||||||||||||
|
Capitalized costs
|
Fair valuation
adjustment, net
|
Carrying value
|
||||||||||
|
Work in progress:
|
||||||||||||
|
Bulk cannabis
|
$
|
733
|
$
|
-
|
$
|
733
|
||||||
|
Finished goods
|
||||||||||||
|
Packaged dried cannabis
|
3,421
|
47
|
3,468
|
|||||||||
|
Other products
|
109
|
-
|
109
|
|||||||||
|
Balance as of September 30, 2024
|
$
|
4,263
|
$
|
47
|
$
|
4,310
|
||||||
|
December 31, 2023
|
||||||||||||
|
Capitalized costs
|
Fair valuation
adjustment, net
|
Carrying value
|
||||||||||
|
Work in progress:
|
||||||||||||
|
Bulk cannabis
|
$
|
3,735
|
$
|
-
|
$
|
3,735
|
||||||
|
Finished goods:
|
||||||||||||
|
Packaged dried cannabis
|
4,667
|
984
|
5,651
|
|||||||||
|
Other products
|
590
|
-
|
590
|
|||||||||
|
Balance as of December 31, 2023
|
$
|
8,992
|
$
|
984
|
$
|
9,976
|
||||||
|
During the nine months ended SepteSmber 30, 2024, and 2023, inventory expensed to cost of goods sold of cannabis products was $32,853 and $26,359, respectively, which
included $47 and $710 of non-cash expense, respectively, related to the changes in fair value of inventory sold.
|
|
Cost of revenues in nine months period ended September 30, 2024 and 2023, also include production overhead not allocated to costs of inventories produced and recognized
as an expense as incurred.
|
|
NOTE 4:-
|
FINANCIAL INSTRUMENTS
|
| A. |
Financial instruments are measured either at fair value or at amortized cost. The table below lists the valuation methods used to determine fair value of each financial instrument.
|
|
Financial Instruments Measured at Fair Value
|
Fair Value Method
|
|
|
Liability for Warrants *)
Investment in Xinteza
|
Black & Scholes model (Level 3 category)
Market comparable (Level 3 category)
|
|
Management believes that the carrying amount of cash and cash equivalents, trade receivables, other accounts receivable, trade payables, bank loans and credit facility, other account payables and accrued expenses and accrued purchase
consideration payable, approximate their fair value due to the short-term maturities of these instruments.
*) Finance (income) expense from revaluation of Warrants measured at fair value, for the nine months ended September 30, 2024 and 2023, amounted to $(25) and $(4,547), respectively.
|
|
Issue date
|
||||||||||||
|
May 2023
|
February 2023
|
May 2021
|
||||||||||
|
Expected volatility
|
48.43
|
%
|
48.43
|
%
|
48.43
|
%
|
||||||
|
Share price (Canadian Dollar)
|
3.22
|
3.22
|
3.22
|
|||||||||
|
Expected life (in years)
|
1.603
|
1.356
|
1.603
|
|||||||||
|
Risk-free interest rate
|
3.82
|
%
|
3.98
|
%
|
3.82
|
%
|
||||||
|
Expected dividend yield
|
0
|
%
|
0
|
%
|
0
|
%
|
||||||
|
Per Warrant (Canadian Dollar)
|
$
|
0.025
|
$
|
0.013
|
$
|
0
|
||||||
|
Total Warrants (Canadian Dollar in thousands)
|
$
|
2
|
$
|
11
|
$
|
0
|
||||||
| B. |
On May 26, 2024, the Company has closed a non-brokered private placement of Debentures of the Company. The Debentures fair value for the issuance date was measured using 16.55% IRR and was summarized to $1,975 of Convertible Debt and $327
of conversion option for Convertible Debt.
Finance (income) expense in respect of the Convertible Debt for the nine months ended September 30, 2024, and 2023, amounted to $523 and $nil, respectively.
|
|
NOTE 5:-
|
EQUITY
|
| a. |
Composition of share capital:
|
|
September 30,
|
December 31,
|
|||||||
|
2024
|
2023
|
|||||||
|
Authorized
|
Issued and outstanding
|
Authorized
|
Issued and outstanding
|
|||||
|
Common Shares without par value
|
Unlimited
|
2,232,359
|
Unlimited
|
2,232,359
|
||||
| b. |
Capital issuances:
LIFE Offering
In January and February of 2023, the Company issued an aggregate of 2,828,248 units of the Company (each a “Unit”) at a price of US$1.25 ($1.66) per Unit for aggregate gross proceeds of US$3,535 ($4,702)
thousand in a series of closings pursuant to a non-brokered private placement offering to purchasers resident in Canada (except the Province of Quebec) and/or other qualifying jurisdictions relying on the listed issuer financing exemption
under Part 5A of National Instrument 45-106 – Prospectus Exemptions (the “LIFE Offering”). Each Unit consisted of one Common Share and one Common Share purchase warrant (each, a “Warrant”), with each Warrant entitling the holder thereof to
purchase one additional Common Share at an exercise price of US$1.50 ($1.99) for a period of 36 months from the date of issue.
|
|
NOTE 5:-
|
EQUITY (Cont.)
|
|
In addition, a non-independent director of the Company subscribed for an aggregate of 131,700 Units under the LIFE Offering at an aggregate subscription price of US$165 ($219). The director's subscription price
was satisfied by the settlement of US$165 in debt owed by the Company to the director for certain consulting services previously rendered by the director to the Company. See also note 5a.
|
|
Concurrent Offering
Concurrent with the LIFE Offering, the Company issued an aggregate of 2,317,171 Units on a non-brokered private placement basis at a price of US$1.25 ($1.66) per Unit for aggregate gross proceeds of US$2,896
($3,852) (the “Concurrent Offering”). The Concurrent Offering was led and participated by insiders of the Company of 1,159,999 Units out of the total Concurrent offering Units. The Units offered under the Concurrent Offering were offered for
sale to purchasers in all provinces and territories of Canada and jurisdictions outside Canada.
|
|
Pursuant to available prospectus exemptions other than for the LIFE Offering exemption.
|
|
All Units issued under the Concurrent Offering were subject to a statutory hold period of four months and one day in accordance with applicable Canadian securities laws. See also note 5a.
|
| c. |
Changes in issued and outstanding share capital:
|
|
Number of shares *)
|
||||
|
Balance as of January 1, 2024
|
2,232,359
|
|||
|
Issuance of Common Shares
|
-
|
|||
|
Balance as of September 30, 2024
|
2,232,359
|
|||
|
The following table lists the movement in the number of share options and the weighted average exercise prices of share options in the 2018 Plan:
|
|
Nine months ended September 30, 2024 *)
|
||||||||
|
Number of options
|
Weighted
average
exercise price
|
|||||||
|
in CAD
|
||||||||
|
Options outstanding at the beginning of the period
|
54,242
|
$
|
172.29
|
|||||
|
Options forfeited during the period
|
(12,151
|
)
|
-
|
|||||
|
Options outstanding at the end of the period
|
42,091
|
$
|
222.03
|
|||||
|
Options exercisable at the end of the period
|
40,789
|
$
|
183.27
|
|||||
|
*) See also note 5a.
|
| NOTE 6:- |
SELECTED STATEMENTS OF PROFIT OR LOSS DATA
|
|
Nine months ended
September 30,
|
Three months ended
September 30,
|
|||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
|||||||||||||
|
Salaries and related expenses
|
$
|
4,776
|
$
|
6,081
|
$
|
1,526
|
$
|
1,821
|
||||||||
|
Depreciation and amortization
|
$
|
1,642
|
$
|
2,265
|
$
|
451
|
$
|
678
|
||||||||
| NOTE 7:- | NET EARNINGS (LOSS) PER SHARE |
|
Details of the number of shares and income (loss) used in the computation of earnings per share:
|
|
Nine months ended September 30,
|
||||||||||||||||
|
2024
|
2023
|
|||||||||||||||
|
Weighted average number of shares (in thousands)(*)
|
Net loss attributable to equity holders of the Company
|
Weighted average number of shares (in thousands)(*)
|
Net loss attributable to equity holders of the Company
|
|||||||||||||
|
For the computation of basic net earnings from continuing operations
|
2,232
|
$
|
(9,574
|
)
|
2,104
|
$
|
(6,209
|
)
|
||||||||
|
Effect of potential dilutive Common Shares
|
-
|
-
|
-
|
-
|
||||||||||||
|
For the computation of diluted net earnings from continuing operations
|
2,232
|
$
|
(9,574
|
)
|
2,104
|
$
|
(6,209
|
)
|
||||||||
|
Three months ended September 30,
|
||||||||||||||||
|
2024
|
2023
|
|||||||||||||||
|
Weighted average number of shares (in thousands)(*)
|
Net loss attributable to equity holders of the Company
|
Weighted average number of shares (in thousands)(*)
|
Net loss attributable to equity holders of the Company
|
|||||||||||||
|
For the computation of basic net earnings from continuing operations
|
2,232
|
$
|
(922
|
)
|
2,232
|
(2,150
|
)
|
|||||||||
|
Effect of potential dilutive Common Shares
|
-
|
-
|
-
|
-
|
||||||||||||
|
For the computation of diluted net earnings from continuing operations
|
2,232
|
$
|
(922
|
)
|
2,232
|
(2,150
|
)
|
|||||||||
|
*) See note 5a.
|
| NOTE 8:- |
OPERATING SEGMENTS
|
| a. |
Reporting operating segments:
|
|
Operating segments are reported in a manner consistent with the internal reporting providedb to the chief operating decision-maker ("CODM"), who is responsible for
allocating resources and assessing performance of the operating segments. The Company's Chief Executive Officer is the CODM. The Company has determined that it operates in two operating segments (after the reclassification of the operating
activities of the Trichome Group in Canada as discontinued operations).
Nine months ended September 30, 2024:
|
|
Israel
|
Germany
|
Adjustments
|
Total
|
|||||||||||||
|
Revenue
|
$
|
30,219
|
$
|
10,477
|
$
|
-
|
$
|
40,696
|
||||||||
|
Segment gain (loss)
|
$
|
(8,261
|
)
|
$
|
993
|
$
|
-
|
$
|
(7,268
|
)
|
||||||
|
Unallocated corporate expenses
|
$
|
(2,184
|
)
|
$
|
(2,184
|
)
|
||||||||||
|
Total operating loss
|
$
|
(9,452
|
)
|
|||||||||||||
|
Depreciation, amortization and impairment
|
$
|
1,520
|
$
|
122
|
$
|
-
|
$
|
1,642
|
||||||||
|
Nine months ended September 30, 2023:
|
|
Israel
|
Germany
|
Adjustments
|
Total
|
|||||||||||||
|
Revenue
|
$
|
33,941
|
$
|
4,165
|
$
|
-
|
$
|
38,106
|
||||||||
|
Segment loss
|
$
|
(2,974
|
)
|
$
|
(1,035
|
)
|
$
|
-
|
$
|
(4,009
|
)
|
|||||
|
Unallocated corporate expenses
|
$
|
(3,618
|
)
|
$
|
(3,618
|
)
|
||||||||||
|
Total operating loss
|
$
|
(7,627
|
)
|
|||||||||||||
|
Depreciation, amortization and impairment
|
$
|
2,139
|
$
|
126
|
$
|
-
|
$
|
2,265
|
||||||||
| NOTE 8:- |
OPERATING SEGMENTS (Cont.)
|
|
Three months ended September 30, 2024:
|
|
Israel
|
Germany
|
Adjustments
|
Total
|
|||||||||||||
|
Revenue
|
$
|
8,066
|
$
|
5,817
|
$
|
-
|
$
|
13,883
|
||||||||
|
Segment gain (loss)
|
$
|
(929
|
)
|
$
|
642
|
$
|
-
|
$
|
(287
|
)
|
||||||
|
Unallocated corporate expenses
|
$
|
(666
|
)
|
$
|
(666
|
)
|
||||||||||
|
Total operating loss
|
$
|
(953
|
)
|
|||||||||||||
|
Depreciation, amortization and impairment
|
$
|
402
|
$
|
49
|
$
|
-
|
$
|
451
|
||||||||
|
Three months ended September 30, 2023:
|
|
Israel
|
Germany
|
Adjustments
|
Total
|
|||||||||||||
|
Revenue
|
$
|
10,832
|
$
|
1,538
|
$
|
-
|
$
|
12,370
|
||||||||
|
Segment loss
|
$
|
(1,132
|
)
|
$
|
(268
|
)
|
$
|
-
|
$
|
(1,400
|
)
|
|||||
|
Unallocated corporate expenses
|
$
|
(859
|
)
|
$
|
(859
|
)
|
||||||||||
|
Total operating loss
|
$
|
(2,259
|
)
|
|||||||||||||
|
Depreciation, amortization and impairment
|
$
|
630
|
$
|
48
|
$
|
-
|
$
|
678
|
||||||||
| NOTE 9:- |
DECONSOLIDATION OF ORANIM PHARMACY
|
| On April 16, 2024, the Company announced that following a reconciliation between the parties regarding all remaining unpaid installments ($1,930) by the company, relating to the Oranim Pharmacy Acquisition completed on March 28, 2022, the parties have mutually agreed to deconsolidate the transaction. As a result, the Company shares (51%) were transferred back to the seller. |
|
The assets and liabilities of Oranim included in the consolidated statement of financial position as of December 31, 2023, and immediately prior to
the deconsolidation on April 15, 2024, are as follows:
|
|
April 15,
2024
|
December 31,
2023
|
|||||||
|
ASSETS
|
||||||||
|
|
||||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$
|
346
|
$
|
308
|
||||
|
Trade receivables
|
1,324
|
1,289
|
||||||
|
Other accounts receivable
|
758
|
761
|
||||||
|
Inventories
|
837
|
725
|
||||||
|
|
||||||||
|
|
3,265
|
3,083
|
||||||
|
Non-current assets:
|
||||||||
|
Property, plant and equipment, net
|
783
|
802
|
||||||
|
Right-of-use assets, net
|
533
|
565
|
||||||
|
Intangible assets, net
|
1,414
|
1,575
|
||||||
|
Goodwill
|
3,499
|
3,455
|
||||||
|
|
||||||||
|
|
6,229
|
6,397
|
||||||
|
|
||||||||
|
Total Assets
|
$
|
9,494
|
$
|
9,480
|
||||
|
|
April 15,
2024
|
December 31,
2023
|
||||||
|
LIABILITIES
|
||||||||
|
|
||||||||
|
Current liabilities:
|
||||||||
|
Trade payables
|
$
|
1,597
|
$
|
1,477
|
||||
|
Other accounts payable and accrued expenses
|
176
|
230
|
||||||
|
Purchase consideration payable
|
2,172
|
2,097
|
||||||
|
Put option liability
|
1,973
|
2,697
|
||||||
|
Current maturities of operating lease liabilities
|
155
|
152
|
||||||
|
|
||||||||
|
|
6,073
|
6,653
|
||||||
|
Non-current liabilities:
|
||||||||
|
Lease liabilities
|
372
|
406
|
||||||
|
Deferred tax liability, net
|
326
|
364
|
||||||
|
|
||||||||
|
|
698
|
770
|
||||||
|
|
||||||||
|
Total liabilities
|
$
|
6,771
|
$
|
7,423
|
||||
|
Non controlling interest
|
$
|
(41
|
)
|
$
|
219
|
|||
| NOTE 10:- |
SUBSEQUENT EVENTS
|
| a. |
Non-brokered Private Placement of units
On November 12, 2024, the Company has closed a non-brokered private placement offering through issuance of 742,511 Units for gross proceed of $2,138. Each Unit will be
comprised of one Share and one Share purchase warrant and was sold at a price of $2.88 CAD per Unit. Each Warrant shall entitle the holder to acquire one additional Share at a price of $4.32 CAD, equal to a 50% premium to the offering price
at any time prior to November 12, 2026.
|
| b. |
Debt Settlement and Loan Bonus
Since October 2022, the Company, through its subsidiaries, has borrowed from various groups more than US$8,000,000 (approximately $10,832). As required by the lenders, the
Company's CEO and chairman of the Board has personally guaranteed the Loans which ascribes the benefit to the Company to be approximately US$560,000 (approximately $758).
On October 2024, the parties entered into a settlement agreement to settle the amount of a pre-funded Share purchase warrant at the Offering Price of a price of $0.00001,
upon receipt of shareholder approval to allow the Company's CEO and chairman of the Board to become a control person (as defined in the policies of the Exchange).
|
| c. |
Loan repayment
|
|
On October 31, 2024, IMC repaid a loan to A.D.I. CAR ALARMS & STEREO SYSTEMS Ltd. at total amount of NIS 5,400 thousand (approximately $1,970).
|
|
On November 4, 2024, IMC repaid a loan to A.D.I. CAR ALARMS & STEREO SYSTEMS Ltd. at total amount of NIS 600 thousand (approximately $219).
|
|
Legal Entity
|
Jurisdiction
|
Relationship with the Company
|
|
I.M.C. Holdings Ltd. (“IMC Holdings”)
|
Israel
|
Wholly-owned subsidiary
|
|
I.M.C. Pharma Ltd. (“IMC Pharma”)
|
Israel
|
Wholly-owned subsidiary of IMC Holdings
|
|
I.M.C. Farms Israel Ltd. (“IMC Farms”)
|
Israel
|
Wholly-owned subsidiary of IMC Holdings
|
|
Focus Medical Herbs Ltd. (“Focus”)
|
Israel
|
Subsidiary of IMC Holdings *
|
|
R.A. Yarok Pharm Ltd. (“Pharm Yarok”)
|
Israel
|
Wholly-owned subsidiary of IMC Holdings
|
|
Rosen High Way Ltd. (“Rosen High Way”)
|
Israel
|
Wholly-owned subsidiary of IMC Holdings
|
|
Revoly Trading and Marketing Ltd. dba Vironna Pharm (“Vironna”)
|
Israel
|
Subsidiary of IMC Holdings
|
|
Trichome Financial Corp. (“Trichome”)**
|
Canada
|
Wholly-owned subsidiary
|
| • |
Continue building on the increasing demand and positive momentum in Israel and Germany, supported by strategic alliances with Canadian suppliers and a highly skilled sourcing team, to cement its leadership position in markets where the
Company operates.
|
| • |
Develop and execute a long-term growth plan in Germany, based on the strong sourcing infrastructure in Israel which is powered by advanced product knowledge and regulatory expertise establishing, in the Company’s view, a competitive
advantage following the April 1, 2024, legalization in Germany.
|
| • |
Increasing inventory levels to meet the rising demand in Germany and securing new suppliers and additional supply chains from Israel and other countries to ensure product availability and support our growth in Germany.
|
| • |
Properly position brands with respect to target-market, price, potency and quality, such as our IMC brand in Israel and Germany.
|
| • |
Strong focus on efficiencies and synergies as a global organization with domestic expertise in Israel and Germany.
|
| • |
High-quality, reliable supply to our customers and patients, leading to recurring sales.
|
| • |
Ongoing introduction of new Stock Keeping Unit (“SKUs”) to keep consumers and patients engaged.
|
|
The WAGNERS™ brand launched in Israel in Q1 2022, with indoor-grown cannabis imported from Canada. The WAGNERS™ brand
was the first international premium, indoor-grown brand introduced to the Israel cannabis market, at a competitive price point. The WAGNERS™ brand includes Cherry Jam, Rainforest Crunch and Silverback#4.
 |
 |
|
BLKMKT™, the Company’s second Canadian brand, super-premium product line with indoor-grown,
hand-dried and hand-trimmed high-THC cannabis flowers. The BLKMKT™ includes BLK MLK, YA HEMI, PURPLE RAIN, JEALOUSY, Hemi GLTO and RAINBOW P.
|
 |
|
|
For the period ended
September 30,
|
For the three months ended
September 30,
|
For the year ended December 31,
|
|||||||||||||||||
|
Financial Results
|
2024
|
2023
|
2024
|
2023
|
2023
|
|||||||||||||||
|
Net Revenues
|
$
|
40,696
|
$
|
38,106
|
$
|
13,883
|
$
|
12,370
|
$
|
48,804
|
||||||||||
|
Gross profit before fair value impacts in cost of sales
|
$
|
5,818
|
$
|
9,715
|
$
|
3,170
|
$
|
2,738
|
$
|
10,830
|
||||||||||
|
Gross margin before fair value impacts in cost of sales (%)
|
14
|
%
|
25
|
%
|
23
|
%
|
22
|
%
|
22
|
%
|
||||||||||
|
Operating Income (Loss)
|
$
|
(9,452
|
)
|
$
|
(7,627
|
)
|
$
|
(953
|
)
|
$
|
(2,259
|
)
|
$
|
(12,792
|
)
|
|||||
|
Net Income (Loss)
|
$
|
(10,558
|
)
|
$
|
(6,708
|
)
|
$
|
(1,082
|
)
|
$
|
(2,136
|
)
|
$
|
(10,228
|
)
|
|||||
|
Loss per share attributable to equity holders of the Company - Basic (in CAD) *
|
$
|
(4.29
|
)
|
$
|
(2.95
|
)
|
$
|
(0.41
|
)
|
$
|
(0.96
|
)
|
$
|
(0.74
|
)
|
|||||
|
Loss per share attributable to equity holders of the Company - Diluted (in CAD) *
|
$
|
(4.29
|
)
|
$
|
(2.95
|
)
|
$
|
(0.41
|
)
|
$
|
(0.96
|
)
|
$
|
(0.74
|
)
|
|||||
|
For the Nine Months Ended
September 30,
|
For the Three months ended
September 30,
|
For the Year ended December 31,
|
||||||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
2023
|
||||||||||||||||
|
Average net selling price of dried flower (per Gram)
|
$
|
6.01
|
$
|
5.34
|
$
|
6.20
|
$
|
4.35
|
$
|
5.14
|
||||||||||
|
Quantity of dried flower sold (in Kilograms)
|
6,408
|
6,528
|
2,202
|
2,558
|
8,609
|
|||||||||||||||
|
Germany Region Revenue for the Three months ended
|
||||||||||||
|
September 30, 2024
|
June 30,
2024
|
March 31,
2024
|
||||||||||
|
Revenue for the period
|
$
|
5,817
|
$
|
3,508
|
$
|
1,152
|
||||||
|
Q vs Q Increase %
|
66
|
%
|
205
|
%
|
-
|
|||||||
|
Israel
|
Germany
|
Adjustments
|
Total
|
|||||||||||||||||||||||||||||
|
2024
|
2023(*)
|
|
2024
|
2023(*)
|
|
2024
|
2023(*)
|
|
2024
|
2023(*)
|
|
|||||||||||||||||||||
|
Revenues
|
$
|
30,219
|
$
|
33,941
|
$
|
10,477
|
$
|
4,165
|
$
|
-
|
$
|
-
|
$
|
40,696
|
$
|
38,106
|
||||||||||||||||
|
Segment income (loss)
|
$
|
(8,261
|
)
|
$
|
(2,974
|
)
|
$
|
993
|
$
|
(1,035
|
)
|
$
|
-
|
$
|
-
|
$
|
(7,268
|
)
|
$
|
(4,009
|
)
|
|||||||||||
|
Unallocated corporate expenses
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(2,184
|
)
|
$
|
(3,618
|
)
|
$
|
(2,184
|
)
|
$
|
(3,618
|
)
|
||||||||||||
|
Total operating (loss)
|
$
|
(8,261
|
)
|
$
|
(2,974
|
)
|
$
|
993
|
$
|
(1,035
|
)
|
$
|
(2,184
|
)
|
$
|
(3,168
|
)
|
$
|
(9,452
|
)
|
$
|
(7,627
|
)
|
|||||||||
|
Depreciation& amortization
|
$
|
1,520
|
$
|
2,139
|
$
|
122
|
$
|
126
|
$
|
-
|
$
|
-
|
$
|
1,642
|
$
|
2,265
|
||||||||||||||||
| ● |
Revenues for the nine months ended September 30, 2024, and 2023 were $40,696 and $38,106, respectively, representing an increase of $2,590 or 7%. The increase is mainly attributed to accelerated growth in Germany revenue of $6,312 and
decreased Revenue in Israel of $3,722 net. The decrease in Israel is attributed to Oranim deal cancellation resulted with decreased Revenue of approximately $5,099 compared to the nine months ended September 2023.
Revenues for the three months ended September 30, 2024, and 2023 were $13,883 and $12,370, respectively, representing an increase of $1,513 or 12%. The increase is
mainly attributed to accelerated growth in Germany revenue of $4,279 and decreased Revenue in Israel of $2,766 net. The decrease in Israel is attributed to Oranim deal cancellation resulted with decreased Revenue of $3,166 compared to
the three months ended September 2023.
|
| ● |
Revenues from the Israeli operation was attributed to the sale of medical cannabis through the Company’s subsidiaries and the revenues from the Israeli Pharmacies the Company owns, mostly from cannabis products.
|
| ● |
In Germany, Company revenues were attributed to the sale of medical cannabis through Adjupharm.
|
|
Less than one year
|
1 to 5 years
|
6 to 10 years
|
> 10 years
|
|||||||||||||
|
Contractual Obligations
|
$
|
12,955
|
$
|
685
|
-
|
-
|
||||||||||
|
Payments Due by Period
|
||||||||||||||||||||
|
Contractual Obligations
|
Total
|
Less than one year
|
1 to 3 years
|
4 to 5 years
|
After 5 years
|
|||||||||||||||
|
Debt
|
$
|
13,084
|
$
|
12,679
|
$
|
405
|
$
|
-
|
$
|
-
|
||||||||||
|
Finance Lease Obligations
|
$
|
556
|
$
|
276
|
$
|
280
|
$
|
-
|
$
|
-
|
||||||||||
|
Total Contractual Obligations
|
$
|
13,640
|
$
|
12,955
|
$
|
685
|
$
|
-
|
$
|
-
|
||||||||||
|
For the Nine Months Ended
September 30,
|
For the Three months ended
September 30,
|
For the Year ended December 31,
|
||||||||||||||||||
|
Net cash provided by (used in):
|
2024
|
2023
|
2024
|
2023
|
2023
|
|||||||||||||||
|
Operating activities
|
$
|
3,122
|
$
|
(7,857
|
)
|
$
|
2,754
|
$
|
5,355
|
$
|
(8,075
|
)
|
||||||||
|
Investing activities
|
$
|
(472
|
)
|
$
|
(553
|
)
|
$
|
(74
|
)
|
$
|
-
|
$
|
(1,182
|
)
|
||||||
|
Financing activities
|
$
|
(22
|
)
|
$
|
9,454
|
$
|
(665
|
)
|
$
|
(1,223
|
)
|
$
|
9,417
|
|||||||
|
Effect of foreign exchange
|
$
|
(2,483
|
)
|
$
|
(2,189
|
)
|
$
|
(757
|
)
|
$
|
(4,149
|
)
|
$
|
(796
|
)
|
|||||
|
Increase (Decrease) in cash
|
$
|
145
|
$
|
(1,145
|
)
|
$
|
1,258
|
$
|
(17
|
)
|
$
|
(636
|
)
|
|||||||
|
For the year ended
|
December 31,
2023 |
December 31, 2022
|
December 31, 2021
|
|||||||||
|
Revenues
|
$
|
48,804
|
$
|
54,335
|
$
|
34,053
|
||||||
|
Net Loss
|
$
|
(10,228
|
)
|
$
|
(24,922
|
)
|
$
|
(664
|
)
|
|||
|
Basic net income (Loss) per share:
|
$
|
(4.45
|
)
|
$
|
(18.81
|
)
|
$
|
0.12
|
||||
|
Diluted net income (Loss) per share:
|
$
|
(4.45
|
)
|
$
|
(22.87
|
)
|
$
|
(21.72
|
)
|
|||
|
Total assets
|
$
|
48,813
|
$
|
60,676
|
$
|
129,066
|
||||||
|
Total non-crurent liabilities
|
$
|
2,305
|
$
|
3,060
|
$
|
21,354
|
||||||
|
For the three months ended
|
September 30,
2024 |
June 30,
2024 |
March 31,
2024 |
December 31, 2023
|
||||||||||||
|
Revenues
|
$
|
13,883
|
$
|
14,750
|
$
|
12,063
|
$
|
10,698
|
||||||||
|
Net Loss
|
$
|
(1,082
|
)
|
$
|
(3,456
|
)
|
$
|
(6,020
|
)
|
$
|
(3,520
|
)
|
||||
|
Basic net income (Loss) per share:
|
$
|
(0.41
|
)
|
$
|
(1.36
|
)
|
$
|
(2.52
|
)
|
$
|
(1.47
|
)
|
||||
|
Diluted net loss per share:
|
$
|
(0.41
|
)
|
$
|
(1.36
|
)
|
$
|
(2.52
|
)
|
$
|
(1.47
|
)
|
||||
|
For the three months ended
|
September 30, 2023
|
June 30,
2023 |
March 31,
2023 (1)
|
December 31, 2022
|
||||||||||||
|
Revenues
|
$
|
12,370
|
$
|
13,207
|
$
|
12,529
|
$
|
14,461
|
||||||||
|
Net income (Loss)
|
$
|
(2,136
|
)
|
$
|
(3,706
|
)
|
$
|
(866
|
)
|
$
|
(9,650
|
)
|
||||
|
Basic net income (Loss) per share:
|
$
|
(0.96
|
)
|
$
|
(1.57
|
)
|
$
|
(0.3
|
)
|
$
|
(7.94
|
)
|
||||
|
Diluted net income (Loss) per share:
|
$
|
(0.96
|
)
|
$
|
(1.57
|
)
|
$
|
(0.3
|
)
|
$
|
(7.70
|
)
|
||||
|
For the nine Months Ended
September 30,
|
For the three months ended
September 30,
|
For the Year ended December 31,
|
||||||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
2023
|
||||||||||||||||
|
Net Revenue
|
$
|
40,696
|
$
|
38,106
|
$
|
13,883
|
$
|
12,370
|
$
|
48,404
|
||||||||||
|
Cost of sales
|
$
|
(34,878
|
)
|
$
|
(28,391
|
)
|
$
|
(10,713
|
)
|
$
|
(9,632
|
)
|
$
|
(37,974
|
)
|
|||||
|
Gross profit before FV adjustments
|
$
|
5,818
|
$
|
9,715
|
$
|
3,170
|
$
|
2,738
|
$
|
10,830
|
||||||||||
|
Gross margin before FV adjustments (non-IFRS)
|
14
|
%
|
25
|
%
|
23
|
%
|
22
|
%
|
22
|
%
|
||||||||||
|
For the Nine Months ended
September 30,
|
For the Three Months ended
September 30,
|
For the Year ended December 31,
|
||||||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
2023
|
||||||||||||||||
|
Operating Loss
|
$
|
(9,452
|
)
|
$
|
(7,627
|
)
|
$
|
(953
|
)
|
$
|
(2,259
|
)
|
$
|
(12,792
|
)
|
|||||
|
Depreciation & Amortization
|
$
|
1,642
|
$
|
2,265
|
$
|
451
|
$
|
678
|
$
|
2,996
|
||||||||||
|
EBITDA
|
$
|
(7,810
|
)
|
$
|
(5,362
|
)
|
$
|
(502
|
)
|
$
|
(1,581
|
)
|
$
|
(9,796
|
)
|
|||||
|
IFRS Biological assets fair value adjustments, net1
|
$
|
47
|
$
|
710
|
$
|
22
|
$
|
93
|
$
|
984
|
||||||||||
|
Share-based payments
|
$
|
364
|
$
|
316
|
$
|
244
|
$
|
195
|
$
|
225
|
||||||||||
|
Restructuring cost 2
|
$
|
-
|
$
|
617
|
$
|
-
|
$
|
-
|
$
|
617
|
||||||||||
|
Other non-recurring costs 3
|
$
|
2,734
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
|
Adjusted EBITDA (Non-IFRS)
|
$
|
(4,665
|
)
|
$
|
(3,719
|
)
|
$
|
(236
|
)
|
$
|
(1,293
|
)
|
$
|
(7,970
|
)
|
|||||
| 1. |
Losses from unrealized change in fair value of biological assets and realized fair value adjustments on inventory. See “Cost of Revenues” section of the MD&A.
|
| 2. |
Costs attributable to the Israel Restructuring and closure of Sde Avraham Farm in 2022, and to Israel reorganization plan of the company’s management and operations in 2023.
|
| 3. |
Due to revocation of the Oranim transaction dated April 16, 2024.
|
|
Less than one year
|
1 to 5 years
|
6 to 10 years
|
>10 years
|
|||||||||||||
|
Lease liabilities
|
$
|
276
|
$
|
280
|
-
|
-
|
||||||||||
|
Less than one year
|
1 to 5 years
|
6 to 10 years
|
>10 years
|
|||||||||||||
|
Lease liabilities
|
$
|
466
|
$
|
818
|
-
|
-
|
||||||||||
| 1. |
The contractual party of the Company was not the Stroakmont & Atton. The contract with Stroakmont & Atton was only concluded as a sham transaction to cover up a contract with a company named Uniclaro GmbH. Therefore, Stroakmont
& Atton is not the real purchaser rather than Uniclaro GmbH.
|
| 2. |
The Company allegedly placed an order with Uniclaro GmbH for a total of 4.3 million Clongene COVID-19 tests, of which Uniclaro GmbH claims to have a payment claim against the Company for a partial delivery of 380,400 Clongene COVID-19
tests in the total amount of EUR 941,897.20. Uniclaro GmbH has assigned this alleged claim against the Company to Stroakmont & Atton Trading GmbH, and Stroakmont & Atton Trading GmbH has precautionary declared a set-off against the
Company’s claim.
|
| 1. |
Adjupharm was not sentenced. Uniclaro's lawsuit for payment of EUR 1,046,010.00 in exchange for delivery of 300,000 Clungene tests was dismissed.
|
| 2. |
Uniclaro is sentenced to pay Adjupharm EUR 53,990.00 plus interest at 5 percentage points above the German basis rate since 17.01.2023.
|
| 3. |
Uniclaro shall bear the procedural costs.
|
| • |
On April 2, 2019, IMC Holdings and Focus entered into an option agreement (the “Focus Agreement”) pursuant to which IMC Holdings acquired an option to purchase, at its sole discretion and in
compliance with Israeli cannabis regulation, all the ordinary shares held by Messrs. Shuster and Gabay held in Focus at a price equal to NIS 765.67 per ordinary share until April 2029. On November 30, 2023, IMC Holdings sent a request
letter to approve IMC Holding’s exercise of the option and on February 25, 2024, IMCA's approval was obtained. Effective February 27, 2024, IMC Holdings acquired 74% of the ordinary shares of Focus.
|
| • |
The Company is a party to Indemnification Agreement with certain directors and officers of the Company and Trichome to cover certain tax liabilities, interest and penalties arising from the Trichome Transaction. See “Risk Factors - Tax Remittance” section of the MD&A.
|
| • |
On April 17, 2024, R.A. Yarok Pharm entered into a loan agreement with a non-financial institute in the amount of NIS 3,000,000 (approximately $1,082,000). Such a loan bears interest at an annual rate of 15% and mature 12 months from the
date of issuance (the "Loan"). The Loan is secured by the following collaterals and guarantees: (a) a first-ranking floating charge over the assets of A.R. Yarok Pharm, (b) a first-ranking fixed
charge over the holdings (23.3%) of its subsidiary, IMC Holdings, of Xinteza, (c) a personal guarantee by Mr. Oren Shuster, the Company’s Chief Executive Officer and (D) a guarantee by the Company.
|
| • |
On October 12, 2023, Oren Shuster, the CEO (the "Insider") loaned an amount of NIS 500 thousand (approximately $170) to IMC Holdings. The participation of the CEO constituted a “related party
transaction”, as such term is defined in MI 61-101 and would require the Company to receive minority shareholder approval for and obtain a formal valuation for the subject matter of, the transaction in accordance with MI 61-101, prior to
the completion of such transaction. However, in completing the loan, the Company has relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101, in each case on the basis that the fair market
value of the CEO’s loan did not exceed 25% of the market capitalization of the Company, as determined in accordance with MI 61-101. On May 29, 2024, the Company closed a non-brokered private placement (the “Offering”)
of secured convertible debentures of the Company (each, a “Debenture”) for aggregate proceeds of $2,091,977. The Insider has subscribed for an aggregate of $237,214 of Debentures in the Offering. The
Insider’s participation in the Offering (the “Insider Transaction”) is a “related party transaction” as described above.
|
| • |
On November 12, 2024, the Company announced that further to its press release dated October 4, 2024 (the “October 4 Release”), the Company has closed its previously announced non-brokered private placement offering (the “Offering”) effective November 12, 2024 (the
“Closing Date”) through the issuance of 742,517 Units for gross proceed of C$2,138,448.96 Capitalized terms not otherwise defined
herein have the meanings attributed to them in the October 4 Release.
|
| • |
Further details will be included in a material change report to be filed by the Company. The Company did not file a material change report more than 21 days before the closing date of the Transactions as the participation of
Participating Insiders in the Offering was not definitively known to the Corporation until closing. In the Company’s view, the shorter period was necessary to permit the Company to close the Transactions in a timeframe consistent with usual
market practice for transactions of this nature and was reasonable and necessary to improve the Company’s financial position. Effective October 4, 2024, the Company has cancelled an aggregate of 31,305 options (“Options”) to purchase Shares, which were previously granted to Board members, officers, employees, advisors and consultants of the Company (each a “Participant”). Management reviewed
the Company’s outstanding Options and determined that certain Options granted to such Participants, at exercise prices ranging from $6.60 to $600 per Share, no longer represented a realistic incentive to motivate such Participants. The
Company has also approved the grant of 31,305 Options to certain eligible persons of the Company, at an exercise price of greater of: (i) the Warrant Exercise Price; and (ii) C$3.00m per Share, with an expiry date of two years from the date
of issuance (the “Option Grants”). The Options Grants vest as follows: one third vest immediately, one third vests on the six-month anniversary and the final one third vests on the twelve-month
anniversary. All securities issued under the Option Grants are subject to a statutory hold period of four months plus one day from the date of issuance, in accordance with the polices of the Exchange.
|
| • |
Effective October 4, 2024, the Company has cancelled an aggregate of 142,784 Share purchase warrants (the “Subject Warrants”) to purchase Shares, which were previously granted to Mr. Shuster.
Management reviewed the Company’s outstanding warrants and determined that the Subject Warrants at an exercise price of US$9.00 per Share, no longer represented a realistic incentive to motivate Mr. Shuster.
|
| a. |
The reason for the bill-and-hold arrangement is substantive (for example, the customer has requested the arrangement);
|
| b. |
The product is identified separately as belonging to the customer;
|
| c. |
The product currently is ready for physical delivery to the customer.
|
| d. |
The Group does not have the ability to use the product by selling it or delivering it to another customer.
|
| a. |
Amendments to IAS 1,"Non-Current liabilities with Covenants and Classification of Liabilities as current or non-current":
|
| b. |
Amendment to IFRS 16, "LEASES ":
|
| c. |
Amendments to IAS 7 and IFRS 7, "Statement of Cash Flows", and IFRS 7, "Financial Instruments: Disclosures ":
In May 2023, the IASB published amendments to International Accounting Standard 7, Statement of Cash Flows, and IFRS 7, Financial Instruments: Disclosures
(hereinafter: "the amendments"), to clarify the characteristics of addressing the presentation of liabilities and the associated cash flows arising out of supplier finance arrangements, as well as disclosures required for such
arrangements.
The disclosure requirements in the amendments are intended to assist and enable users of the financial statements to assess the effects of supplier financing
arrangements on the entity's obligations as well as on the entity's cash flow and exposure to liquidity risk. The Amendment is applicable for annual periods beginning on or after January 1, 2024.
According to the transition provisions of the Amendments, the Company is not required to provide disclosures in interim periods during the first year of adoption,
and therefore the above Amendments did not have a material impact on the Company's condensed interim consolidated financial statements. However, the Amendments are expected to affect the disclosures of supplier finance arrangements in the
Company's annual consolidated financial statements.
|
| d. |
IFRS 18, "Presentation and Disclosure in Financial Statements":
|
| A. |
Financial instruments are measured either at fair value or at amortized cost. The table below lists the valuation methods used to determine fair value of each financial instrument.
|
|
Financial Instruments Measured at Fair Value
|
Fair Value Method
|
|
|
Warrants liability1
|
Black & Scholes model (Level 3 category)
|
|
|
Investment in affiliates
|
Market comparable (Level 3 category)
|
|
|
Financial Instruments Measured at
Amortized Cost |
||
|
Cash and cash equivalents, trade receivables and other account receivables
|
Carrying amount (approximates fair value due to short-term nature)
|
|
|
Loans receivable
|
Amortized cost (effective interest method)
|
|
|
Trade payables, other accounts payable and accrued expenses
|
Carrying amount (approximates fair value due to short-term nature)
|
| 1. |
Finance expense (income) include fair value adjustment of warrants, investments, and derivative assets measured at fair value, for the nine months ended September 30, 2024, and 2023, amounted to $24 and $(4,547), respectively.
|
|
Issue date
|
||||||||||||
|
May 2023
|
February 2023
|
May 2021
|
||||||||||
|
Expected volatility
|
48.43
|
%
|
48.43
|
%
|
48.43
|
%
|
||||||
|
Share price (Canadian Dollar)
|
3.22
|
3.22
|
3.22
|
|||||||||
|
Expected life (in years)
|
1.603
|
1.356
|
1.603
|
|||||||||
|
Risk-free interest rate
|
3.82
|
%
|
3.98
|
%
|
3.82
|
%
|
||||||
|
Expected dividend yield
|
0
|
%
|
0
|
%
|
0
|
%
|
||||||
|
Fair value:
|
||||||||||||
|
Per Warrant (Canadian Dollar)
|
$
|
0.025
|
$
|
0.013
|
$
|
0
|
||||||
|
Total Warrants (Canadian Dollar in thousands)
|
$
|
2
|
$
|
11
|
$
|
0
|
||||||
| B. |
Debentures are measured in fair value for the issuance date. The Debentures fair value for the issuance date was measured using 16.55% IRR and was summarized to $1,975 of Convertible Debt and $327 of conversion option for Convertible
Debt. Finance (income) expense in respect of the Convertible Debt for the nine months ended September 30, 2024, and 2023, amounted to $523 and $nil, respectively.
|
| ● |
maintenance of records in reasonable detail, that accurately and fairly reflect the transactions and dispositions of assets.
|
| ● |
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with applicable IFRS.
|
| ● |
receipts and expenditures are only being made in accordance with authorizations of management or the Board; and
|
| ● |
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial instruments.
|
| (a) |
the Company receiving economic benefits from Focus (and the terms of the contractual agreements between the Company and Focus cannot be changed without the approval of IMC Holdings);
|
| (b) |
IMC Holdings holds 74% interest in Focus;
|
| (c) |
Messrs. Shuster and Gabay each being a director of Focus (while Mr. Shuster concurrently being a CEO, director and substantial shareholder of the Company and Mr. Gabay concurrently being a substantial shareholder of the Company); and
|
| (d) |
the Company providing management and support activities to Focus through a services agreement.
|
| ● |
the Company’s business objectives and milestones and the anticipated timing of execution.
|
| ● |
the performance of the Company’s business, strategies and operations.
|
| ● |
the Company’s intentions to expand the business, operations and potential activities of the Company.
|
| ● |
the Company’s plans to expand its sales channels, distribution, delivery and storage capacity, and reach to medical cannabis patients.
|
| ● |
the competitive conditions of the cannabis industry and the growth of medical or adult-use recreational cannabis markets in the jurisdictions in which the Company operates.
|
| ● |
the competitive conditions of the industry, including the Company’s ability to maintain or grow its market share and maintain its competitive advantages.
|
| ● |
statements relating to the Company’s commitment to responsible growth and compliance with the strictest regulatory environments.
|
| ● |
the Company’s focus on providing premium cannabis products to medical patients in the jurisdictions in which the Company conducts business and any other jurisdiction in which the Company may conduct business in the future.
|
| ● |
the Company’s plans to amplify its commercial and brand power to become a global high-quality cannabis player.
|
| ● |
the Company’s primary goal of sustainably increasing revenue in its core markets.
|
| ● |
the demand and momentum in the Company’s Israeli and Germany operations.
|
| ● |
how the Company intends to position its brands.
|
| ● |
the efficiencies and synergies of the Company as a global organization with domestic expertise in Israel and Germany.
|
| ● |
expectations that providing high-quality, reliable supply to the Company’s customers and patients will lead to recurring sales.
|
| ● |
expectations related to the Company’s introduction of new Stock Keeping Unit (“SKUs”)
|
| ● |
anticipated cost savings from the reorganization of the Company's and the completion thereof upon the timelines disclosed herein.
|
| ● |
geographic diversification and brand recognition and the growth of the Company’s brands in the jurisdictions that the Company operates in or may expand to.
|
| ● |
expectations related to the Company’s ability to address the ongoing needs and preferences of medical cannabis patients.
|
| ● |
the Company’s retail presence, distribution capabilities and data-driven insights.
|
| ● |
the future impact of the Regulations Amendment regarding the transition reform from licenses to prescriptions for medical treatment of cannabis.
|
| ● |
the Company’s continued partnerships with third party suppliers and partners and the benefits thereof.
|
| ● |
the Company’s ability to achieve profitability in 2024.
|
| ● |
the number of patients in Israel licensed by the Israeli Ministry of Health (“MOH”) to consume medical cannabis.
|
| ● |
expectations relating to the number of patients paying out-of-pocket for medical cannabis products in Germany.
|
| ● |
the anticipated decriminalization or legalization of adult-use recreational cannabis in Israel and Germany.
|
| ● |
expectations related to the demand and the ability of the Company to source premium and ultra-premium cannabis products exclusively and competition in this product segment.
|
| ● |
the anticipated impact of inflation and liquidity on the Company’s performance.
|
| ● |
expectations with respect to the Company’s operating budget and the assumptions related thereto.
|
| ● |
expectations relating to the Company as a going concern and its ability to conduct business under the ordinary course of operations.
|
| ● |
expectations related to the collection the payment awarded in the Judgment and the chances of the claim advancing or the potential outcome of the Test Kits Appeal (as defined herein);
|
| ● |
the continued listing of the Company’s Common Shares in the capital of the Company (“Common Shares”) on the Nasdaq Stock Market (“Nasdaq”) and Canadian
Securities Exchange (“CSE”);
|
| ● |
cannabis licensing in the jurisdictions in which the Company operates.
|
| ● |
the renewal and/or extension of the Company’s licenses.
|
| ● |
the Company’s anticipated operating cash requirements and future financing needs.
|
| ● |
the Company’s expectations regarding its revenue, expenses, profit margins and operations.
|
| ● |
the anticipated Gross Margins, EBITDA and Adjusted EBITDA from the Company’s operations.
|
| ● |
the expected increase in revenue and margins in its Israeli medical cannabis market activities arising from its acquisitions.
|
| ● |
future opportunities for the Company in Israel, particularly in the retail and distribution segments of the cannabis market.
|
| ● |
future expansion and growth opportunities for the Company in Germany and Europe and the timing of such.
|
| ● |
contractual obligations and commitments; and
|
| ● |
the Company completing the Potential Transaction with Kadimastem (each as defined herein).
|
| ● |
the Company has the ability to achieve its business objectives and milestones under the stated timelines.
|
| ● |
the Company will succeed in carrying out its business, strategies and operations.
|
| ● |
the Company will realize upon its intentions to expand the business, operations and potential activities of the Company.
|
| ● |
the Company will expand its sales channels, distribution, delivery and storage capacity, and reach to medical cannabis patients.
|
| ● |
the competitive conditions of the cannabis industry and the growth of medical or adult-use recreational cannabis in the jurisdictions in which the Company operates.
|
| ● |
the competitive conditions of the industry will be favourable to the Company, and the Company has the ability to maintain or grow its market share and maintain its competitive advantages.
|
| ● |
the Company will commit to responsible growth and compliance with the strictest regulatory environments.
|
| ● |
the Company will remain focused on providing premium cannabis products to medical patients in the jurisdictions in which the Company conducts business and any other jurisdiction in which the Company may conduct business in the future.
|
| ● |
the Company has the ability to amplify its commercial and brand power to become a global high-quality cannabis player.
|
| ● |
the Company will maintain its primary goal of sustainably increasing revenue in its core markets.
|
| ● |
the demand and momentum in the Company’s Israeli and Germany operations will be favourable to the Company.
|
| ● |
the Company will carry out its plans to position its brands as stated.
|
| ● |
the Company’s Company has the ability to realize upon the stated efficiencies and synergies the Company as a global organization with domestic expertise in Israel and Germany.
|
| ● |
providing a high-quality, reliable supply to the Company’s customers and patients will lead to recurring sales.
|
| ● |
the Company will introduce new SKUs.
|
| ● |
the Company has the ability to achieve geographic diversification and brand recognition and the growth of the Company’s brands in the jurisdictions that the Company operates in or may expand to.
|
| ● |
the Company’s has the ability to address the ongoing needs and preferences of medical cannabis patients;
|
| ● |
the Company has the ability to realize upon its retail presence, distribution capabilities and data-driven insights.
|
| ● |
the future impact of the Regulations Amendment will be favourable to the Company.
|
| ● |
the Company will maintain its partnerships with third parties, suppliers and partners.
|
| ● |
the Company has the ability to achieve profitability in 2024;
|
| ● |
the accuracy of number of patients in Israel licensed by the MOH to consume medical cannabis.
|
| ● |
the accuracy of the number of patients paying out-of-pocket medical cannabis products in Germany.
|
| ● |
the anticipated decriminalization or legalization of adult-use recreational cannabis in Israel and Germany will occur.
|
| ● |
the Company has the ability to source premium and ultra-premium cannabis products exclusively and competition in this product segment.
|
| ● |
the anticipated impact of inflation and liquidity on the Company’s performance will be as forecasted.
|
| ● |
the accuracy with respect to the Company’s operating budget and the assumptions related thereto.
|
| ● |
the Company will remain as going concern.
|
| ● |
a favourable outcome with respect to the collection the payment awarded in the Judgment and the chances of the claim advancing or the potential outcome of the Test Kits Appeal.
|
| ● |
the Company’s Common Shares will remain listed on the Nasdaq and the CSE.
|
| ● |
the Company’s ability to maintain cannabis licensing in the jurisdictions in which the Company operates.
|
| ● |
the Company has the ability to obtain the renewal and/or extension of the Company’s licenses.
|
| ● |
the Company has the ability to meet operating cash requirements and future financing needs.
|
| ● |
the Company will meet or surpass its expectations regarding its revenue, expenses, profit margins and operations.
|
| ● |
the Company will meet or surpass its expectations regarding Gross Margins, EBITDA and Adjusted EBITDA from the Company’s operations.
|
| ● |
the Company will increase its revenue and margins in its Israeli medical cannabis market activities arising from its acquisitions.
|
| ● |
the Company has the ability to capitalize on future opportunities for the Company in Israel, particularly in the retail and distribution segments of the cannabis market.
|
| ● |
the Company will carry out its future expansion and growth opportunities for the Company in Germany and Europe and the timing of such.
|
| ● |
the Company will fulfill its contractual obligations and commitments; and
|
| ● |
the Company will complete the Proposed Transaction with Kadimastem.
|
| ● |
the Company’s inability to achieve its business objectives and milestones under the stated timelines.
|
| ● |
the Company inability to carry out its business, strategies and operations.
|
| ● |
the Company’s inability to realize upon its intentions to expand the business, operations and potential activities of the Company.
|
| ● |
the Company will not expand its sales channels, distribution, delivery and storage capacity, and reach to medical cannabis patients.
|
| ● |
the competitive conditions of the cannabis industry and the growth of medical or adult-use recreational cannabis markets will be unfavourable to the Company in the jurisdictions in which the Company operates.
|
| ● |
the competitive conditions of the industry will be unfavourable to the Company, and the Company’s inability to maintain or grow its market share and maintain its competitive advantages.
|
| ● |
the Company will not commit to responsible growth and compliance with the strictest regulatory environments.
|
| ● |
the Company’s inability to remain focused on providing premium cannabis products to medical patients in the jurisdictions in which the Company conducts business and any other jurisdiction in which the Company may conduct business in the
future.
|
| ● |
the Company inability to amplify its commercial and brand power to become a global high-quality cannabis player.
|
| ● |
the Company will not maintain its primary goal of sustainably increasing revenue in its core markets.
|
| ● |
the demand and momentum in the Company’s Israeli and Germany operations will be unfavourable to the Company.
|
| ● |
the Company will not carry out its plans to position its brands as stated.
|
| ● |
the Company’s inability to realize upon the stated efficiencies and synergies of the Company as a global organization with domestic expertise in Israel and Germany.
|
| ● |
providing a high-quality, reliable supply to the Company’s customers and patients will not lead to recurring sales.
|
| ● |
the Company will not introduce of new SKUs.
|
| ● |
the Company’s inability to realize upon the anticipated cost savings from the reorganization.
|
| ● |
the Company’s inability to achieve geographic diversification and brand recognition and the growth of the Company’s brands in the jurisdictions that the Company operates in or may expand to.
|
| ● |
the Company’s inability to address the ongoing needs and preferences of medical cannabis patients.
|
| ● |
the Company’s inability to realize upon its retail presence, distribution capabilities and data-driven insights.
|
| ● |
the future impact of the Regulations Amendment will be unfavourable to the Company.
|
| ● |
the Company will not maintain its partnerships with third party suppliers and partners.
|
| ● |
the inaccuracy of number of patients in Israel licensed by the MOH to consume medical cannabis.
|
| ● |
the inaccuracy of the number of patients paying out-of-pocket for medical cannabis products in Germany.
|
| ● |
the anticipated decriminalization or legalization of adult-use recreational cannabis in Israel and Germany will not occur.
|
| ● |
the Company’s ability to source premium and ultra-premium cannabis products exclusively and competition in this product segment.
|
| ● |
the anticipated impact of inflation and liquidity on the Company’s performance will not be as forecasted.
|
| ● |
the inaccuracy with respect to the Company’s operating budget and the assumptions related thereto.
|
| ● |
the Company will not remain as going concern.
|
| ● |
an unfavourable outcome of the negotiations or the Construction Proceedings.
|
| ● |
an unfavourable outcome with respect to the collection the payment awarded in the Judgment and the chances of the claim advancing or the potential outcome of the Appeal.
|
| ● |
the Company’s Common Shares will not remain listed on the Nasdaq and the CSE.
|
| ● |
the Company’s inability to maintain cannabis licensing in the jurisdictions in which the Company operates.
|
| ● |
the Company’s inability to obtain the renewal and/or extension of the Company’s licenses.
|
| ● |
the Company’s inability to meet operating cash requirements and future financing needs.
|
| ● |
the Company will not meet or surpass its expectations regarding its revenue, expenses, profit margins and operations.
|
| ● |
the Company will not meet or surpass its expectations regarding Gross Margins, EBITDA and Adjusted EBITDA from the Company’s operations.
|
| ● |
the Company will not increase its revenue and margins in its Israeli medical cannabis market activities arising from its acquisitions.
|
| ● |
the Company’s ability to capitalize on future opportunities for the Company in Israel, particularly in the retail and distribution segments of the cannabis market.
|
| ● |
the Company will not carry out its future expansion and growth opportunities for the Company in Germany and Europe and the timing of such; and
|
| ● |
the Company will not fulfill its contractual obligations and commitments; and
|
| 1. |
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of IM Cannabis Corp. (the
“issuer”) for the interim period ended September 30, 2024.
|
| 2. |
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue
statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the
interim filings.
|
| 3. |
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other
financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
|
| 4. |
Responsibility: The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control
over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
|
| 5. |
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer and I have, as at the end of the period covered by the
interim filings:
|
| (a) |
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
| (i) |
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
| (ii) |
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods
specified in securities legislation; and
|
| (b) |
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the
issuer’s GAAP.
|
| 5.1 |
Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework (COSO
Framework 2013) published by The Committee of Sponsoring Organization of the Treadway Commission (COSO).
|
| 5.2 |
N/A
|
| (a) |
he fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of
|
| (i) |
N/A
|
| (ii) |
N/A
|
| (iii) |
N/A
|
| (b) |
summary financial information about the proportionately consolidated entity, special purpose entity or business that the issuer acquired that has been proportionately consolidated or consolidated in the issuer’s financial statements.
|
| 6. |
Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period
beginning on July 1, 2024 and ended on September 30, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
|
| 1. |
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of IM Cannabis Corp. (the
“issuer”) for the interim period ended September 30, 2024.
|
| 2. |
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a
material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
| 3. |
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other
financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
|
| 4. |
Responsibility: The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control
over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
|
| 5. |
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer and I have, as at the end of the period covered by the
interim filings
|
| (a) |
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
| (i) |
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
| (ii) |
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods
specified in securities legislation; and
|
| (b) |
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the
issuer’s GAAP.
|
| 5.1 |
Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework (COSO
Framework 2013) published by The Committee of Sponsoring Organization of the Treadway Commission (COSO).
|
| 5.2 |
N/A
|
| (a) |
the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of
|
|
(i)
|
N/A
|
|
(ii)
|
N/A
|
|
(iii)
|
N/A
|
| (b) |
summary financial information about the proportionately consolidated entity, special purpose entity or business that the issuer acquired that has been proportionately consolidated or consolidated in the issuer’s financial statements
|
| 6. |
Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period
beginning on July 1, 2024 and ended on September 30, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
|
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