IM Cannabis Reports First Quarter Financial Results
PR Newswire
TORONTO and GLIL YAM, Israel, May 15, 2025
IMC Delivers Net Profit and 87% Gross Margin Improvement in Q1, Reflecting Strategic and Operational Progress
TORONTO and GLIL YAM, Israel, May 15, 2025 /PRNewswire/ -- IM Cannabis Corp. (the "Company" or "IMC") (NASDAQ: IMCC) (CSE: IMCC), an international medical cannabis company, announced its financial results today for the first quarter ended March 31, 2025. All amounts are reported in Canadian dollars and compared to the quarter ended March 31, 2024, unless otherwise stated.
IMC also announces the intention to complete a non-brokered private placement of secured debentures.
Q1 2025 Financial Highlights
-- Net profit of $175K
-- 94% Gross profit increase vs. Q1 2024 of $3.5M vs. $1.8M and 29% Gross
profit increase vs. Q4 2024 of $2.7M
-- 4% Revenue increase vs. Q1 2024 of $12.5M vs. $12.1M
-- 50% decrease in operating expenses vs. Q1 2024 excluding the one-time
Oranim revocation related losses of $3.3M vs. $6.6M and 56% decrease
including Oranim
-- 129% increase of Non-IFRS Adjusted EBITDA profit to $0.6M vs. loss of
$2.2M
Management Commentary
"Q1 2025 is a clear inflection point for IMC," said Oren Shuster, Chief Executive Officer of IMC. "Achieving net profitability and an 87% improvement in gross margin year-over-year demonstrates the strength of the strategic and operational groundwork we laid in 2024--and reinforces our trajectory toward sustained, profitable growth"
"IMC's Q1 2025 results mark a major turning point in our financial performance. We achieved net profitability, driven by a 94% increase in gross profit, a 56% reduction in operating expenses and a 4% increase in revenue year-over-year," said Uri Birenberg, Chief Financial Officer of IMC. "Our operating ratio improved significantly to 26%, down from 77% in Q1 2024, and our Non-IFRS Adjusted EBITDA grew to $0.6 million--up 129% from a $2.2 million loss a year ago. These results reflect the strength of our strategy and the discipline with which we are executing it."
Operational Highlights
The Company intends to complete a non-brokered private placement (the "Offering") of secured convertible debentures of the Company (each, a "Debenture") for aggregate proceeds of up to C$2,500,000. The Debentures will mature on the date that is 12 months from the date of issuance and will not incur interest except in the event of default. The Debentures are being issued to holders of debentures that mature on May 26, 2025. The principal of the Debenture may be converted into common shares in the Company at a conversion price to be determined at the time of issuance.
Q1 2025 Conference Call
The Company will host a Zoom web conference call today at 9:00 a.m. ET to discuss the results, followed by a question-and-answer session for the investment community. Investors are invited to register by clicking here. All relevant information will be sent upon registration.
If you are unable to join us live, a recording of the call will be available on our website at https://investors.imcannabis.com/ within 24 hours after the call.
Q1 2025 Financial Results
-- Net Profit in Q1 2025 was $0.2 million, compared to net loss of $6
million in Q1 2024.
-- Revenues for the first quarter of 2025 were $12.5 million compared to
$12.1 million in the first quarter of 2024, an increase of 4%. The
increase is mainly due to accelerated growth in Germany of $6.6 million
and offset by decreased revenue in Israel of $6.1 million.
-- Gross profit for the first quarter of 2025 was $3.4 million, compared to
$1.8 million in Q1 2024, an increase of 94%.
-- Total operating expenses in Q1 2025 were $3.3 million compared to $7.4
million in Q1 2024, a decrease of 56%.
-- G&A Expenses in Q1 2025 were $2 million, compared to $2.3 million in Q1
2024, a decrease of 14%.
-- Selling and Marketing Expenses in Q1 2025 were $1.3 million, compared to
$2.3 million in Q1 2024, a decrease of 44%.
-- Basic and diluted Profit per Share in Q1 2025 was $0.09, compared to a
loss of $2.52 per Share in Q1 2024.
-- Non-IFRS Adjusted EBITDA Profit in Q1 2025 was $0.6 million, compared to
an adjusted EBITDA loss of $2.2 million in Q1 2024, an increase of 129%.
-- Cash and Cash Equivalents as of March 31, 2025, were $1.4 million
compared to $0.9 million in December 31, 2024.
-- Total assets as of March 31, 2025, were $44.9 million, compared to $39.2
million in December 31, 2024, an increase of 15%. The increase is mainly
attributed to an increase of $2.9 million in trade receivables and an
increase of $2.2 million in Inventory.
-- Total Liabilities as of March 31, 2025, were $41.8 million, compared to
$36 in December 31, 2024, an increase of 16%. The increase is mainly
attributed to an increase of $4.9 million in trade payables, an increase
of $3.7 million in other accounts payable and offset by a decrease of
$2.4 million due to reduction in Credit from bank institutions and others
and long term credit.
The Company's financial statements as of March 31, 2025 includes a note regarding the Company's ability to continue as a going concern. The Company's Q1 2025 financial results do not include any adjustments relating to the recoverability and classification of assets or liabilities that might be necessary should the Company be unable to continue as a going concern. For more information, please refer to the "Liquidity and Capital Resources" and "Risk Factors" sections in the Company's management's discussion and analysis for the quarter ended March 31, 2025.
Non-IFRS Measures
This press release makes reference to "Gross Margin" and "Adjusted EBITDA", which are financial measures that are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. These measures are provided as complementary information to the Company's IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should neither be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.
For an explanation of how management defines Gross Margin and Adjusted EBITDA, see the Company's management's discussion and analysis for the period ended March 31, 2024, available under the Company's SEDAR+ profile at www.sedarplus.ca on EDGAR at www.sec.gov/edgar.
We reconcile these non-IFRS financial measures to the most comparable IFRS measures as set out below.
About IM Cannabis Corp.
IMC (Nasdaq: IMCC) (CSE: IMCC) is an international cannabis company that provides premium cannabis products to medical patients in Israel and Germany, two of the largest medical cannabis markets. The Company leverages a transnational ecosystem powered by a unique data-driven approach and a globally sourced product supply chain. With an unwavering commitment to responsible growth and compliance with the strictest regulatory environments, the Company strives to amplify its commercial and brand power to become a global high-quality cannabis player.
The IMC ecosystem operates in Israel through Focus Medical Herbs Ltd., which imports and distributes cannabis to medical patients, leveraging years of proprietary data and patient insights. The Company also operates medical cannabis retail pharmacies, online platforms and logistical hubs in Israel that enable the safe delivery and quality control of IMC products throughout the entire value chain. In Germany, the IMC ecosystem operates through Adjupharm GmbH, where it distributes cannabis to pharmacies for medical cannabis patients.
Disclaimer for Forward-Looking Statements
This press release contains forward-looking information or forward-looking statements under applicable Canadian and United States securities laws (collectively, "forward-looking statements"). All information that addresses activities or developments that we expect to occur in the future are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect", "likely" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made. In the press release, such forward-looking statements include, but are not limited to, statements relating to: the impact of the Israel-Hamas war on the Company, including its operations and the medical cannabis industry in Israel; the timing and impact of the legalization of medicinal cannabis in Germany, including, the Company having it "all in house"; the Company being positioned to take advantage of the legalization; the Company's growth in 2025; the market growth for medicinal cannabis in Germany; the stated benefits of the Company's EU-GMP processing facility and an EU-GDP logistics center; the Company to host a teleconference meeting as stated; and the Company's stated goals, scope, and nature of operations in Germany, Israel, and other jurisdictions the Company may operate.
Forward-looking statements are based on assumptions that may prove to be incorrect, including but not limited to: the Company's ability to focus and resources to achieve sustainable and profitable growth in its highest value markets; the Company's ability to mitigate the impact of the Israel-Hamas war on the Company; the Company's ability to take advantage of the legalization of medicinal cannabis in Germany; the Company's ability to host a teleconference meeting as stated; and the Company's ability to carry out its stated goals, scope, and nature of operations in Germany, Israel, and other jurisdictions the Company may operate.
The above lists of forward-looking statements and assumptions are not exhaustive. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated or implied by such forward-looking statements due to a number of factors and risks. These include: the failure of the Company to comply with applicable regulatory requirements in a highly regulated industry; unexpected changes in governmental policies and regulations in the jurisdictions in which the Company operates; the Company's ability to continue to meet the listing requirements of the Canadian Securities Exchange and the NASDAQ Capital Market; any unexpected failure to maintain in good standing or renew its licenses; the ability of the Company and its subsidiaries (collectively, the "Group") to deliver on their sales commitments or growth objectives; the reliance of the Group on third-party supply agreements to provide sufficient quantities of medical cannabis to fulfil the Group's obligations; the Group's possible exposure to liability, the perceived level of risk related thereto, and the anticipated results of any litigation or other similar disputes or legal proceedings involving the Group; the impact of increasing competition; any lack of merger and acquisition opportunities; adverse market conditions; the inherent uncertainty of production quantities, qualities and cost estimates and the potential for unexpected costs and expenses; risks of product liability and other safety-related liability from the usage of the Group's cannabis products; supply chain constraints; reliance on key personnel; the risk of defaulting on existing debt; risks surrounding war, conflict and civil unrest in Eastern Europe and the Middle East, including the impact of the Israel-Hamas war on the Company, its operations and the medical cannabis industry in Israel; risks associated with the Company focusing on the Israel and Germany markets; the inability of the Company to achieve sustainable profitability and/or increase shareholder value; the inability of the Company to actively manage costs and/or improve margins; the inability of the company to grow and/or maintain sales; the inability of the Company to meet its goals and/or strategic plans; the inability of the Company to reduce costs and/or maintain revenues; the Company's inability to take advantage of the legalization of medicinal cannabis in Germany; and the Company's inability to host a teleconference meeting as stated.
Please see the other risks, uncertainties and factors set out under the heading "Risk Factors" in the Company's annual report dated March 31, 2025, which is available on the Company's issuer profile on SEDAR+ at www.sedarplus.ca and Edgar at www.sec.gov/edgar. Any forward-looking statement included in this press release is made as of the date of this press release and is based on the beliefs, estimates, expectations and opinions of management on the date such forward looking information is made. The Company does not undertake any obligation to update forward-looking statements except as required by applicable securities laws. Investors should not place undue reliance on forward-looking statements. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
Company Contact:
Anna Taranko, Director Investor & Public Relations
IM Cannabis Corp.
+49 157 80554338
a.taranko@imcannabis.de
Oren Shuster, CEO
IM Cannabis Corp.
+972-77-3603504
mailto:info@imcannabis.com
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
--------------------------------------------------------------------
Canadian Dollars in thousands
March 31, December 31,
2025 2024
----------------- -------------------
Note (Unaudited)
----- -----------------
ASSETS
CURRENT ASSETS:
Cash $ 1,389 $ 863
Restricted cash
deposit 64 64
Trade receivables 16,653 13,803
Other current assets 5,981 5,419
Inventory 3 5,433 3,215
----------------- -------------------
29,520 23,364
----------------- -------------------
NON-CURRENT ASSETS:
Investments in
affiliate 1,598 1,631
Property, plant and
equipment, net 3,752 3,730
Intangible assets, net 3,012 3,333
Goodwill 6,540 6,679
Right-of-use assets,
net 512 451
15,414 15,824
----------------- -------------------
Total assets $ 44,934 $ 39,188
================= ===================
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
------------------------------------------------------------------------
Canadian Dollars in thousands
March 31, December 31,
2025 2024
-------------- ------------------
Note (Unaudited)
---- --------------
LIABILITIES AND
SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of
operating lease liabilities $ 306 $ 262
Trade payables 16,036 11,159
Other current liabilities 8,677 5,001
Credit from bank institutions
and others 12,916 15,145
Convertible debentures 2,042 1,968
Derivative warrants
liabilities and prefunded
warrants 4 817 1,383
40,794 34,918
-------------- ------------------
NON-CURRENT LIABILITIES:
Operating lease liabilities 200 171
Credit from bank institutions
and others 314 466
Deferred tax liabilities 453 487
967 1,124
-------------- ------------------
Total liabilities 41,761 36,042
============== ==================
EQUITY ATTRIBUTABLE TO EQUITY
HOLDERS OF THE COMPANY: 5
Share capital and premium 265,000 265,000
Capital reserve from
translation differences of
foreign operations (1,502) (1,265)
Conversion feature related to
convertible debentures 297 297
Capital reserve from
share-based payment
transactions 158 150
Accumulated deficit (258,629) (258,939)
-------------- ------------------
Total equity attributable to
equity holders of the
Company 5,324 5,243
Non-controlling interests (2,151) (2,097)
Total equity 3,173 3,146
Total liabilities and equity $ 44,934 $ 39,188
============== ==================
The accompanying notes are an integral part of the consolidated
financial statements
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME (UNAUDITED)
------------------------------------------------------------------------
Canadian Dollars in thousands, except per share data
Three months ended
March 31,
-------------------------
Note 2025 2024
---- ----------- ------------
Revenues $ 12,500 $ 12,063
Cost of revenues 9,052 10,274
----------- ------------
Gross profit before fair value
adjustments 3,448 1,789
----------- ------------
Fair value adjustments:
Realized fair value adjustments on
inventory sold in the period - (10)
----------- ------------
Total fair value adjustments - (10)
Gross profit 3,448 1,779
----------- ------------
General and administrative expenses 2,009 2,332
Selling and marketing expenses 1,273 2,292
Share-based compensation 8 32
Other operating expenses 9 - 2,753
----------- ------------
Total operating expenses 3,290 7,409
Operating income (loss) 158 (5,630)
----------- ------------
Finance expense, net 4 (12) (501)
income (loss) before income taxes 146 (6,131)
----------- ------------
Income tax benefit 29 111
----------- ------------
Net income (loss) $ 175 $ (6,020)
=========== ============
The accompanying notes are an integral part of the consolidated
financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME (UNAUDITED)
---------------------------------------------------------------
Canadian Dollars in thousands, except per share data
Three months ended
March 31,
----------------------------------
Note 2025 2024 (*)
---- ---------------- --------------
Other comprehensive
income that will not
be reclassified to
profit or loss in
subsequent periods:
Total other
comprehensive
income that will
not be
reclassified to
profit or loss in
subsequent periods 35 67
Exchange differences
on translation to
presentation
currency - 1,330
Total other
comprehensive
income (loss) that
will not be
reclassified to
profit or loss in
subsequent periods 35 1,397
---------------- --------------
Other comprehensive
income that will be
reclassified to
profit or loss in
subsequent periods:
Adjustments arising
from translating
financial
statements of
foreign operation (191) (35)
Total other
comprehensive
income (loss) that
will be
reclassified to
profit or loss in
subsequent periods (191) (35)
Total other
comprehensive
income (loss) (156) 1,362
Total comprehensive
income (loss) $ 19 $ (4,658)
================ ==============
Net income (loss)
attributable to:
Equity holders of
the Company 275 (5,623)
Non-controlling
interests (100) (397)
---------------- --------------
$ 175 $ (6,020)
================ ==============
Total comprehensive
income (loss)
attributable to:
Equity holders of
the Company 73 (4,252)
Non-controlling
interests (54) (406)
---------------- --------------
$ 19 $ (4,658)
================ ==============
Net income (loss)
per share
attributable to
equity holders of
the Company: 7
Basic and diluted
income (loss) per
share (in CAD) $ 0.09 $ (2.52)
================ ==============
(*) Loss per share includes the effect of Reverse Share Split
(see also Note 5a below). The accompanying notes are an
integral part of the consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
-------------------------------------------------------------------------------------------------------------------------------
Canadian Dollars in thousands
Share Reserve from Conversion
capital share-based option for
and payment convertible Translation Accumulated Non-controlling Total
premium transactions debt reserve deficit Total interests equity
---------- -------------- ---------------- ------------- ------------ -------- ---------------- -------
Balance as of
January 1,
2025 $ 265,000 $ 150 $ 297 $ (1,265) $ (258,939) $ 5,243 $ (2,097) $3,146
Net income
(Loss) - - - - 275 275 (100) 175
Total other
comprehensive
income (loss) - - - (237) 35 (202) 46 (156)
---------- -------------- ---------------- ------------- ------------ -------- ---------------- -------
Total
comprehensive
loss - - - (237) 310 73 (54) 19
Share-based
compensation - 8 - - 8 - 8
Balance as of
March 31,
2025 $ 265,000 $ 158 $ 297 $ (1,502) $ (258,629) $ 5,324 $ (2,151) $3,173
========== ============== ================ ============= ============ ======== ================ =======
Reserve from
share-based
Share Capital payment Translation Accumulated Non-controlling Total
and premium transactions reserve deficit Total interests equity
-------------- ----------------- ----------------- --------------- --------- ----------------- -----------
Balance as of
January 1,
2024 $ 253,882 $ 9,637 $ 95 $ (249,145) $ 14,469 $ (769) $ 13,700
Net loss - - - (5,623) (5,623) (397) (6,020)
Total other
comprehensive
loss - - 1,304 67 1,371 (9) 1,362
-------------- ----------------- ----------------- --------------- --------- ----------------- -----------
Total
comprehensive
loss - - 1,304 (5,556) (4,252) (406) (4,658)
Other
comprehensive
income
Classification - - - (730) (730) - (730)
Share-based
compensation - 32 - - 32 - 32
Forfeited
options 5 (5) - - - - -
-----------------
Balance as of
March 31, 2024 $ 253,887 $ 9,664 $ 1,399 $ (255,431) $ 9,519 $ (1,175) $ 8,344
============== ================= ================= =============== ========= ================= ===========
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
--------------------------------------------------------------------------
Canadian Dollars in thousands
Three months ended
March 31,
----------------------------
2025 2024
-------------- ------------
Cash provided by operating activities:
-------------------------------------------
Net income (loss) $ 175 $ (6,020)
Adjustments for non-cash items:
Fair value adjustment on sale of
inventory - 10
Fair value adjustment on Warrants,
investments and accounts receivable (565) 100
Interest recorded in respect of the
convertible debt 73 -
Depreciation of property, plant and
equipment 46 147
Amortization of intangible assets 338 452
Depreciation of right-of-use assets 79 118
Impairment of PPE - 2,753
Finance expenses, net 504 401
Deferred tax liability, net (40) (69)
Share-based payment 8 32
Discount expenses in respect of credit 36 -
479 3,944
Changes in working capital:
Increase (decrease) in trade receivables (3,245) 1,332
Increase (decrease) in other accounts
receivable and advances to suppliers (1,405) 159
Increase (decrease) in inventories, net
of fair value adjustments (2,349) 2,159
Increase in trade payables 5,270 663
Increase (decrease) in other accounts
payable and accrued expenses 5,544 (2,745)
3,815 1,568
Taxes paid (6) (121)
Net cash provided (used) in operating
activities 4,463 (629)
Cash flows from investing activities:
-------------------------------------------
Purchase of property, plant and equipment - (2)
Net cash used in investing activities $ - $ (2)
============== ============
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
------------------------------------------------------------------------
Canadian Dollars in thousands
Three months ended
March 31,
--------------------
2025 2024
--------- ---------
Cash flow from financing activities:
-------------------------------------------------
Proceeds from issuance of share capital, net of
issuance costs - 176
Proceeds from issuance of warrants - (176)
Repayment of lease liability (68) (118)
Interest paid - lease liability (10) (15)
Repayment of bank loan and credit facilities $(594.SI)$ (2,856)
Cash paid for interest (976) (444)
Proceeds (repayments) from discounted checks (1,224) 2,581
Net cash provided (used) by financing activities (2,872) (852)
--------- ---------
Effect of foreign exchange on cash and cash
equivalents (1,065) 718
--------- ---------
Increase (decrease) in cash and cash equivalents 526 (765)
Cash and cash equivalents at the beginning of the
period 863 1,813
--------- ---------
Cash and cash equivalents at end of the period $ 1,389 $ 1,048
Supplemental disclosure of non-cash activities:
Right-of-use asset recognized with corresponding
lease liability $ 159 $ 40
========= =========
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
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SOURCE IM Cannabis Corp.
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