Full Press Release Details
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
CANADIAN DOLLARS IN THOUSANDS
| Page | |
| Condensed Interim Consolidated Statements of Financial Position | 3 - 4 |
| Condensed Interim Consolidated Statements of Profit or Loss and Other Comprehensive Income | 5 - 6 |
| Condensed Interim Consolidated Statements of Changes in Equity | 7 |
| Condensed Interim Consolidated Statements of Cash Flows | 8 - 10 |
| Notes to Condensed Interim Consolidated Financial Statements | 11 - 37 |
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL
Canadian Dollars in thousands
| September 30, 2021 | December 31, 2020 | ||
| Note | Unaudited | ||
| ASSETS | |||
| CURRENT ASSETS: | |||
| Cash and cash equivalents | $ 17,116 | $ 8,885 | |
| Restricted bank deposit | 1 | 18 | |
| Trade receivables | 16,143 | 5,501 | |
| Advances to suppliers | 3,270 | 3,602 | |
| Other accounts receivable | 10,396 | 689 | |
| Investments | 1,019 | - | |
| Loans receivable | 2,672 | - | |
| Biological assets | 4 | 2,712 | 78 |
| Inventories | 5 | 23,920 | 8,370 |
| 77,249 | 27,143 | ||
| NON-CURRENT ASSETS: | |||
| Property, plant and equipment, net | 29,387 | 5,532 | |
| Investments | 2,341 | 2,341 | |
| Derivative assets | 46 | - | |
| Right-of-use assets, net | 17,190 | 935 | |
| Deferred tax assets | 342 | 769 | |
| Intangible assets, net | 3 | 28,631 | 1,092 |
| Goodwill | 3 | 120,201 | 304 |
| 198,138 | 10,973 | ||
| Total assets | $ 275,387 | $ 38,116 |
accompanying notes are an integral part of the condensed interim
consolidated financial statements.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL
Canadian Dollars in thousands
| September 30, 2021 | December 31, 2020 | ||
| Note | Unaudited | ||
| LIABILITIES AND EQUITY | |||
| CURRENT LIABILITIES: | |||
| Bank loans | $ 5,806 | $ - | |
| Trade payables | 9,959 | 2,605 | |
| Other accounts payable and accrued expenses | 3 | 11,074 | 3,497 |
| Accrued purchase consideration | 3 | 5,594 | - |
| Current maturities of lease liabilities | 1,248 | 167 | |
| 33,681 | 6,269 | ||
| NON-CURRENT LIABILITIES: | |||
| Warrants measured at fair value | 6 | 6,524 | 16,540 |
| Lease liabilities | 16,918 | 823 | |
| Long term loans | 378 | - | |
| Employee benefit liabilities, net | 437 | 371 | |
| Deferred tax liability, net | 6,470 | 1,503 | |
| 30,727 | 19,237 | ||
| Total liabilities | 64,408 | 25,506 | |
| EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY: | 7 | ||
| Share capital and premium | 235,940 | 37,040 | |
| Translation reserve | 1,165 | 1,229 | |
| Reserve from share-based payment transactions | 10,342 | 5,829 | |
| Retained earnings (accumulated deficit) | (37,870 ) | (33,001 ) | |
| Total equity attributable to equity holders of the Company | 209,577 | 11,097 | |
| Non-controlling interests | 1,402 | 1,513 | |
| Total equity | 210,979 | 12,610 | |
| Total liabilities and equity | $ 275,387 | $ 38,116 |
accompanying notes are an integral part of the condensed interim
consolidated financial statements.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF PROFIT OR
AND OTHER COMPREHENSIVE INCOME
Canadian Dollars in thousands
| Nine months ended September 30, | Three months ended September 30, | |||
| 2021 | 2020 | 2021 | 2020 | |
| Unaudited | ||||
| Revenues | $ 34,272 | $ 10,990 | $ 14,393 | $ 5,893 |
| Cost of revenues | 26,163 | 4,972 | 11,513 | 2,531 |
| Gross profit before fair value adjustments | 8,109 | 6,018 | 2,880 | 3,362 |
| Fair value adjustments: | ||||
| Unrealized change in fair value of biological assets | 5,484 | 9,042 | 1,123 | 2,287 |
| Realized fair value adjustments on inventory sold in the period | (7,608 ) | (5,099 ) | (2,478 ) | (2,268 ) |
| Total fair value adjustments | (2,124 ) | 3,943 | (1,355 ) | 19 |
| Gross profit | 5,985 | 9,961 | 1,525 | 3,381 |
| General and administrative expenses | 22,634 | 7,223 | 10,246 | 2,197 |
| Selling and marketing expenses | 4,654 | 2,334 | 2,169 | 1,150 |
| Research and development expenses | 10 | 135 | 4 | 1 |
| Share-based compensation | 5,354 | 2,131 | 3,351 | 704 |
| Total operating expenses | 32,652 | 11,823 | 15,770 | 4,052 |
| Operating loss | (26,667 ) | (1,862 ) | (14,245 ) | (671 ) |
| Finance income | 21,617 | 427 | 8,224 | 1,186 |
| Finance expense | (805 ) | (6,402 ) | - | - |
| Finance income (expenses), net | 20,812 | (5,975 ) | 8,224 | 1,186 |
| Income (loss) before income taxes | (5,855 ) | (7,837 ) | (6,021 ) | 515 |
| Income tax expense (benefit) | 175 | 921 | (365 ) | (223 ) |
| Net income (loss) | (6,030 ) | (8,758 ) | (5,656 ) | 738 |
| Other comprehensive income (loss) that will not be reclassified to profit or loss in subsequent periods: | ||||
| Re-measurement gain on defined benefit plans | - | (32 ) | - | 1 |
| Exchange differences on translation to presentation currency | (350 ) | 639 | 888 | (399 ) |
| Total other comprehensive income (loss) that will not be reclassified to profit or loss in subsequent periods | (350 ) | 607 | 888 | (398 ) |
| Other comprehensive income (loss) that will be reclassified to profit or loss in subsequent periods: | ||||
| Adjustments arising from translating financial statements of foreign operation | 288 | (95 ) | 29 | (35 ) |
| Total other comprehensive income (loss) that will be reclassified to profit or loss in subsequent periods | 288 | (95 ) | 29 | (35 ) |
| Total other comprehensive income (loss) | $ (62 ) | $ 512 | $ 917 | $ (433 ) |
| Total comprehensive income (loss) | $ (6,092 ) | $ (8,246 ) | $ (4,739 ) | $ 305 |
accompanying notes are an integral part of the condensed interim
consolidated financial statements.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF PROFIT OR
AND OTHER COMPREHENSIVE INCOME
Canadian Dollars in thousands, except per share data
| Nine months ended September 30, | Three months ended September 30, | ||||
| 2021 | 2020 | 2021 | 2020 | ||
| Note | Unaudited | ||||
| Net income (loss) attributable to: | |||||
| Equity holders of the Company | (4,869 ) | (9,340 ) | (4,285 ) | 656 | |
| Non-controlling interests | (1,161 ) | 582 | (1,371 ) | 82 | |
| (6,030 ) | (8,758 ) | (5,656 ) | 738 | ||
| Total comprehensive net income (loss) attributable to: | |||||
| Equity holders of the Company | (4,933 ) | (8,927 ) | (3,359 ) | 228 | |
| Non-controlling interests | (1,159 ) | 681 | (1,380 ) | 77 | |
| $ (6,092 ) | $ (8,246 ) | $ (4,739 ) | $ 305 | ||
| Loss per share attributable to equity holders of the Company: | |||||
| Basic loss per share (in CAD): | 9 | $ (0.10 ) | $ (0.06 ) | $ (0.06 ) | $ 0.00 |
| Diluted loss per share (in CAD): | 9 | $ (0.51 ) | $ (0.06 ) | $ (0.18 ) | $ 0.00 |
accompanying notes are an integral part of the condensed interim
consolidated financial statements.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN
Canadian Dollars in thousands
| Attributable to equity holders of the Company | |||||||
| Share capital and premium | Reserve for share-based payment transactions | Translation reserve | Retained earnings (accumulated deficit) | Total | Non-controlling interests | Total equity | |
| Balance as of January 1, 2021 | $ 37,040 | $ 5,829 | $ 1,229 | $ (33,001 ) | $ 11,097 | $ 1,513 | $ 12,610 |
| Issuance of shares related to Trichome acquisition | 100,017 | - | - | - | 100,017 | - | 100,017 |
| Issuance of shares related to MYM acquisition | 63,592 | - | - | - | 63,592 | - | 63,592 |
| Issuance of shares, net of approximately $2,700 issuance costs | 28,131 | - | - | - | 28,131 | - | 28,131 |
| Issuance of shares related to acquisitions in Israel | 2,036 | - | - | - | 2,036 | 1,048 | 3,084 |
| Exercise of warrants and compensation options (see Note 7) | 4,149 | - | - | - | 4,149 | - | 4,149 |
| Exercise of options (see Note 7) | 940 | (806 ) | - | - | 134 | - | 134 |
| Share based payment | - | 5,354 | - | - | 5,354 | - | 5,354 |
| Expired options | 35 | (35 ) | - | - | - | - | - |
| Net loss | - | - | - | (4,869 ) | (4,869 ) | (1,161 ) | (6,030 ) |
| Other comprehensive income (loss) | - | - | (64 ) | - | (64 ) | 2 | (62 ) |
| Balance as of September 30, 2021 (Unaudited) | $ 235,940 | $ 10,342 | $ 1,165 | $ (37,870 ) | $ 209,577 | $ 1,402 | $ 210,979 |
| Balance as of January 1, 2020 | $ 25,947 | $ 2,677 | $ 309 | $ (4,273 ) | $ 24,660 | $ 1,449 | $ 26,109 |
| Exercise of warrants and compensation options (see Note 7) | 10,178 | - | - | - | 10,178 | - | 10,178 |
| Exercise of options (see Note 7) | 199 | (80 ) | - | - | 119 | - | 119 |
| Share based payment | - | 2,131 | - | - | 2,131 | - | 2,131 |
| Expired options | 6 | (8 ) | - | - | (2 ) | - | (2 ) |
| Net income (loss) | - | - | - | (9,340 ) | (9,340 ) | 582 | (8,758 ) |
| Other comprehensive income (loss) | - | - | 445 | (32 ) | 413 | 99 | 512 |
| Balance as of September 30, 2020 (Unaudited) | $ 36,330 | $ 4,720 | $ 754 | $ (13,645 ) | $ 28,159 | $ 2,130 | $ 30,289 |
accompanying notes are an integral part of the condensed interim
consolidated financial statements.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH
Canadian Dollars in thousands
| Nine months ended September 30, | ||
| 2021 | 2020 | |
| Unaudited | ||
| Cash flows from operating activities: | ||
| Net loss for the period | $ (6,030 ) | $ (8,758 ) |
| Adjustments for non-cash items: | ||
| Unrealized gain on changes in fair value of biological assets | (5,484 ) | (9,042 ) |
| Fair value adjustment on sale of inventory | 7,608 | 5,099 |
| Fair value adjustment of warrants and derivative assets measured at fair value | (21,169 ) | 6,048 |
| Depreciation of property, plant and equipment | 1,998 | 493 |
| Amortization of intangible assets | 578 | 23 |
| Depreciation of right-of-use assets | 1,028 | 156 |
| Finance expenses, net | 357 | (73 ) |
| Changes in employee benefit liabilities, net | 66 | 41 |
| Deferred tax expense, net | (18 ) | 946 |
| Share-based payment | 5,354 | 2,131 |
| Share - based acquisition costs related to business combination | 1,301 | - |
| Non-cash interest income on loans receivable | 124 | - |
| Impairment of other accounts receivable | 419 | - |
| (7,838 ) | 5,822 | |
| Changes in working capital: | ||
| Increase in trade receivables, net | (7,610 ) | (3,266 ) |
| Increase in other accounts receivable | (4,521 ) | (874 ) |
| Decrease in biological assets, net of fair value adjustments | 3,636 | 6,181 |
| Increase in inventories, net of fair value adjustments | (14,016 ) | (7,804 ) |
| Increase in trade payables | 2,994 | 1,744 |
| Increase (decrease) in other accounts payable and accrued expenses | (5,144 ) | 33 |
| (24,661 ) | (3,986 ) | |
| Taxes paid | (605 ) | (462 ) |
| Net cash used in operating activities | (39,134 ) | (7,384 ) |
| Cash flows from investing activities: | ||
| Purchase of property, plant and equipment | (3,187 ) | (1,780 ) |
| Proceeds from loan receivables | 7,796 | - |
| Purchase of intangible assets | (5 ) | (94 ) |
| Acquisition of businesses, net of cash acquired | (6,856 ) | - |
| Proceeds from (investments in) financial assets | 305 | (1,345 ) |
| Proceeds from (investments in) restricted bank deposit | 17 | (18 ) |
| Net cash used in investing activities | $ (1,930 ) | $ (3,237 ) |
accompanying notes are an integral part of the condensed interim
consolidated financial statements.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH
Canadian Dollars in thousands
| Nine months ended September 30, | ||
| 2021 | 2020 | |
| Unaudited | ||
| Cash flow from financing activities: | ||
| Proceeds from exercise of warrants | $ 3,538 | $ 6,305 |
| Proceeds from exercise of options | 134 | 119 |
| Proceeds from issuance of share capital, net of issuance costs | 28,131 | - |
| Proceeds from issuance of warrants | 11,222 | - |
| Repayment of lease liability | (348 ) | (135 ) |
| Payment of lease liability interest | (913 ) | (51 ) |
| Proceeds from bank loans | 4,174 | - |
| Net cash provided by financing activities | 45,938 | 6,238 |
| Effect of foreign exchange on cash and cash equivalents | 3,357 | 194 |
| Increase (decrease) in cash and cash equivalents | 8,231 | (4,189 ) |
| Cash and cash equivalents at beginning of the period | 8,885 | 13,926 |
| Cash and cash equivalents at end of the period | $ 17,116 | $ 9,737 |
| Supplemental disclosure of non-cash activities: | ||
| Additions to right-of-use assets and corresponding lease liability | $ 1,599 | $ 107 |
Schedule A - Acquisition of TFC:
| The subsidiary's assets and liabilities at date of acquisition: | |
| Working capital (excluding cash and cash equivalents) | $ 9,927 |
| Investments | 319 |
| Property, plant and equipment | 15,193 |
| Right of use assets | 15,037 |
| Lease liability | (15,037 ) |
| Intangible assets | 6,458 |
| Goodwill | 66,769 |
| Common shares issued upon the acquisition | (99,028 ) |
| $ (362 ) |
Schedule B - Acquisition of Panaxia:
| The assets and liabilities at date of acquisition: | |
| Inventory | $ 19 |
| Investments | 958 |
| Property, plant and equipment | 88 |
| Goodwill and intangible assets | 5,895 |
| Accrued purchase consideration liability | (4,139 ) |
| $ 2,821 |
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH
Canadian Dollars in thousands
| Schedule C - Acquisition of MYM: The subsidiary's assets and liabilities at date of acquisition: | |
| Working capital (excluding cash and cash equivalents) | $ 3,453 |
| Property, plant and equipment and right of use assets | 6,735 |
| Lease liability | (873 ) |
| Deferred tax liability | (4,558 ) |
| Intangible assets | 17,200 |
| Goodwill | 41,192 |
| Common shares issued upon the acquisition | (63,280 ) |
| $ (131 ) |
Schedule D - Acquisition of Pharm Yarok:
| The subsidiary's assets and liabilities at date of acquisition: | |
| Working capital (excluding cash and cash equivalents) | $ (646 ) |
| Accrued purchase consideration liability | (1,345 ) |
| Property, plant and equipment | 1,145 |
| Long-term loans | (1,042 ) |
| Intangible assets | 1,544 |
| Deferred tax liability | (355 ) |
| Goodwill | 3,820 |
| $ 3,121 |
Schedule E - Acquisition of Vironna:
| The subsidiary's assets and liabilities at date of acquisition: | |
| Working capital (excluding cash and cash equivalents) | $ 198 |
| Accrued purchase consideration liability | (2,146 ) |
| Property, plant and equipment | 210 |
| Intangible assets | 2,180 |
| Deferred tax liability | (502 ) |
| Goodwill | 2,515 |
| Non-controlling interest | (1,048 ) |
| $ 1,407 |
accompanying notes are an integral part of the condensed interim
consolidated financial statements.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL
Canadian Dollars in thousands, except share and per share
Cannabis Corp. (the "Company" or "IMCC) is listed for trading on
the Canadian Securities Exchange ( CSE ) and,
commencing from March 1, 2021, on NASDAQ under the ticker symbol
IMCC . IMCC's main office is located in Kibutz
operates in the field of medical cannabis, through Focus Medical
Herbs Ltd. ("Focus"), which is licensed under the regulations of
medical cannabis by the Israeli Ministry of Health ("MOH") through
its Israel Medical Cannabis Agency ("IMCA") to breed, grow and
supply medical cannabis product in Israel and all of its operations
are performed pursuant to the Israeli Dangerous Drugs Ordinance
(New Version), 1973 (the "Dangerous Drugs Ordinance"), and the
related regulations issued by IMCA.
Europe, IMCC operates through Adjupharm, a German-based subsidiary
acquired by IMC Holdings on March 15, 2019. Adjupharm is an EU-GMP
certified medical cannabis producer and distributor with wholesale,
narcotics handling, manufacturing, procurement, storage and
distribution licenses granted by German regulatory authorities that
allow for import/export capability with requisite
Canada, IMCC operates through Trichome JWC Acquisition Corp.
( TJAC ) d/b/a JWC, a Canadian federally licensed
producer of cannabis products in the adult-use recreational
cannabis market in Canada.
Company, its subsidiaries and Focus (collectively: the "Group"),
operate in one reporting segment. The majority of the Group's
revenues are generated from sales of medical cannabis products to
customers in Israel and recreational cannabis in Canada. The
remaining revenues are generated from sales of medical cannabis, as
well as other products, to customers in Germany. The Company and
its subsidiaries do not engage in any U.S. cannabis-related
activities as defined in Canadian Securities Administrators Staff
financial statements have been prepared in a condensed format as of
September 30, 2021, and for the nine and three months then
ended (the "condensed interim consolidated financial statements").
These financial statements should be read in conjunction with the
Company's annual financial statements as of December 31, 2020, and
for the year then ended and accompanying notes (the "annual
consolidated financial statements").
March 31, 2020, the outbreak of the novel strain of coronavirus
("COVID-19") and the ongoing pandemic, has resulted in governments
worldwide enacting various emergency measures to combat the spread
of the virus. These measures, which include the implementation of
travel bans, self-imposed quarantine periods, closing of
non-essential businesses and social distancing, have caused
material disruption to businesses globally resulting in an economic