IM Cannabis : Financial Statements Q1 2024

March 31,

December 31,

2024

2023

Note

(Unaudited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

1,048

$

1,813

Trade receivables

6,506

7,651

Advances to suppliers

780

936

Other accounts receivable

3,732

3,889

Inventories

3

7,901

9,976

19,967

24,265

NON-CURRENT ASSETS:

Property, plant and equipment, net

4,939

5,058

Investments in affiliates

2,078

2,285

Right-of-use assets, net

1,243

1,307

Intangible assets, net

5,440

5,803

Goodwill

7,442

10,095

21,142

24,548

Total assets

$

41,109

$

48,813

March 31,

December 31,

2024

2023

Note

(Unaudited)

LIABILITIES AND EQUITY

CURRENT LIABILITIES:

Trade payables

$

9,511

$

9,223

Bank loans and credit facilities

11,941

12,119

Other accounts payable and accrued expenses

4,440

6,218

Accrued purchase consideration liabilities

2,165

2,097

PUT Option liability

1,967

2,697

Current maturities of operating lease liabilities

461

454

30,485

32,808

NON-CURRENT LIABILITIES:

Warrants measured at fair value

4

137

38

Operating lease liabilities

744

815

Long-term loans

401

394

Employee benefit liabilities, net

96

95

Deferred tax liability, net

902

963

2,280

2,305

Total liabilities

32,765

35,113

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE

COMPANY:

5

Share capital and premium

253,887

253,882

Translation reserve

1,399

95

Reserve from share-based payment transactions

9,664

9,637

Accumulated deficit

(255,431)

(249,145)

Total equity attributable to equity holders of the Company

9,519

14,469

Non-controlling interests

(1,175)

(769)

Total equity

8,344

13,700

Total liabilities and equity

$

41,109

$

48,813

Three months ended

March 31,

Note

2024

2023 (*)

Revenues

$

12,063

$

12,529

Cost of revenues

10,274

9,286

Gross profit before fair value adjustments

1,789

3,243

Fair value adjustments:

Realized fair value adjustments on inventory sold in the period

(10)

(339)

Total fair value adjustments

(10)

(339)

Gross profit

1,779

2,904

General and administrative expenses

2,332

3,175

Selling and marketing expenses

2,292

2,805

Restructuring expenses

-

283

Share-based compensation

32

258

Other operating expenses

9

2,753

-

Total operating expenses

7,409

6,521

Operating loss

5,630

3,617

Finance income

4

(14)

3,530

Finance expense

(487)

(795)

Finance income, net

(501)

2,735

Gain (loss) before income taxes

(6,131)

(882)

Income tax benefit

(111)

(16)

Net )loss( gain

(6,020)

(866)

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

67

36

Exchange differences on translation to presentation currency

1,330

(562)

Total other comprehensive income (loss) that will not be

reclassified to profit or loss in subsequent periods

1,397

(526)

Other comprehensive income that will be reclassified to profit or

loss in subsequent periods:

Adjustments arising from translating financial statements of foreign

operation

(35)

155

Total other comprehensive income (loss) that will be reclassified to

profit or loss in subsequent periods

(35)

155

Total other comprehensive income (loss)

1,362

(371)

Total comprehensive loss

$

(4,658)

$

(1,237)

Three months ended

March 31,

Note

2024

2023 (*)

Net income (loss) attributable to:

Equity holders of the Company

(5,623)

(600)

Non-controlling interests

(397)

(266)

$

(6,020)

$

(866)

Total comprehensive income (loss) attributable to:

Equity holders of the Company

(4,252)

(959)

Non-controlling interests

(406)

(278)

$

(4,658)

$

(1,237)

Net income (loss) per share attributable to equity holders of the

Company:

7

Basic and diluted (loss) gain per share (in CAD)

$

(0.42)

$

(0.05)

Earnings (loss) per share attributable to equity holders of the Company

from continuing operations:

Basic and diluted (loss) gain per share (in CAD)

$

(0.42)

$

(0.05)

Reserve from

Share

share-based

Non-

Capital and

payment

Translation

Accumulated

controlling

Total

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

Reserve from

Share

share-based

Non-

Capital and

payment

Translation

Accumulated

controlling

Total

premium

transactions

reserve

deficit

Total

interests

equity

Balance as of January 1, 2023

$

245,776

$

15,167

$

1,283

$

(239,574)

$

22,652

$

1,145

$

23,797

Net loss

-

-

-

(600)

(600)

(266)

(866)

Total other comprehensive loss

-

-

(395)

36

(359)

(12)

(371)

Total comprehensive loss

-

-

(395)

(564)

(959)

(278)

(1,237)

Issuance of common shares

1,736

-

-

-

1,736

-

1,736

Share-based compensation

-

258

-

-

258

-

258

Forfeited options

266

(266)

-

-

-

-

-

Balance as of March 31, 2023

$

247,778

$

15,159

$

888

$

(240,138)

$

23,687

$

867

$

24,554

Three months ended

March 31,

2024

2023 (*)

Cash provided by operating activities:

Net income (loss) for the period

$

(6,020)

$

43

Adjustments for non-cash items:

Fair value adjustment on sale of inventory

10

339

Fair value adjustment on Warrants, investments and accounts

receivable

100

(3,636)

Depreciation of property, plant and equipment

147

174

Amortization of intangible assets

452

456

Depreciation of right-of-use assets

118

179

Impairment of goodwill

2,753

-

Finance expenses, net

401

635

Deferred tax liability, net

(69)

(150)

Share-based payment

32

258

Restructuring expense

-

283

3,944

(1,462)

Changes in working capital:

Decrease (increase) in trade receivables

1,332

1,937

Decrease (increase) in other accounts receivable and advances to

suppliers

159

(940)

Decrease (increase) in inventories, net of fair value adjustments

2,159

90

Decrease (increase) in trade payables

663

(6,021)

Changes in employee benefit liabilities, net

-

(22)

Increase in other accounts payable and accrued expenses

(2,745)

(14)

1,568

(4,970)

Taxes (paid) received

(121)

328

Net cash used in operating activities

(629)

(6,061)

Cash flows from investing activities:

Purchase of property, plant and equipment

(2)

(411)

Payment of purchase consideration

-

(56)

Net cash used in investing activities

$

(2)

$

(467)

Three months ended

March 31,

2024

2023

Cash flow from financing activities:

Proceeds from issuance of share capital, net of issuance costs

176

825

Proceeds from issuance of warrants

(176)

7,027

Repayment of lease liability

(118)

(175)

Interest paid - lease liability

(15)

(18)

Receipt (repayment) of bank loan and credit facilities

(2,856)

(1,046)

Cash paid for interest

(444)

(56)

Proceeds from discounted checks

2,581

-

Net cash (used in) provided by financing activities

(852)

6,557

Effect of foreign exchange on cash and cash equivalents

718

(1,059)

Decrease in cash and cash equivalents

(765)

(1,030)

Cash and cash equivalents at beginning of the period

1,813

2,449

Cash and cash equivalents at end of the period

$

1,048

$

1,419

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

$

-

$

222