IM Cannabis Reports First Quarter Financial Results
Rhea-AI Summary
IM Cannabis Corp. (NASDAQ: IMCC) reported strong Q1 2025 financial results, marking a significant turnaround with a net profit of $175K. The company achieved notable improvements including a 94% increase in gross profit to $3.5M, 4% revenue growth to $12.5M, and a 50% reduction in operating expenses. The company's Non-IFRS Adjusted EBITDA showed a 129% improvement, reaching a profit of $0.6M compared to a previous loss of $2.2M.
Key financial metrics include a significant operating ratio improvement to 26% (down from 77%), and increased cash position of $1.4M. The company also announced plans for a non-brokered private placement of secured debentures for up to C$2.5M. Despite positive operational results, the financial statements include a going concern note, indicating ongoing liquidity challenges.
Positive
- Achieved net profit of $175K, turning around from previous losses
- 94% increase in gross profit to $3.5M year-over-year
- 4% revenue growth to $12.5M compared to Q1 2024
- 56% reduction in operating expenses from $7.4M to $3.3M
- 129% improvement in Adjusted EBITDA to $0.6M profit
- 15% increase in total assets to $44.9M
Negative
- Going concern note in financial statements indicates continued liquidity risks
- 16% increase in total liabilities to $41.8M
- Need for additional financing through private placement of secured debentures
- Decreased revenue in Israel market segment
Insights
IMC's Q1 shows impressive turnaround with first net profit, 94% gross profit growth, and significant operational efficiency improvements.
The Q1 2025 results represent a significant inflection point for IM Cannabis, marking the company's transition to profitability after a period of restructuring. The $175,000 net profit compared to a $6 million loss in Q1 2024 demonstrates remarkable financial improvement. This turnaround is primarily driven by operational efficiencies rather than dramatic revenue growth, with revenues only increasing by a modest 4% year-over-year to $12.5 million.
The most compelling aspects of these results are the 94% increase in gross profit to $3.4 million and the 56% reduction in operating expenses to $3.3 million. This dramatic cost-cutting has transformed the company's operating ratio from 77% to just 26%, indicating substantially improved operational efficiency. The shift to positive Adjusted EBITDA of $0.6 million (a 129% improvement) further validates their strategic reset.
The geographical revenue shift is notable - accelerated growth in Germany ($6.6 million) completely offset decreased revenue in Israel ($6.1 million), suggesting a strategic pivot toward the higher-margin European market.
Despite these improvements, several risk factors remain. The company still includes a going concern note in its financial statements, and the planned $2.5 million convertible debenture offering appears designed to refinance existing debt maturing on May 26, 2025. Cash position remains tight at $1.4 million, while liabilities increased by 16% to $41.8 million, primarily in trade payables and other accounts payable, potentially indicating strained supplier relationships.
This quarterly performance shows tangible progress in the company's transformation, but sustaining profitability while managing the significant debt load will be crucial challenges in coming quarters.
IMC Delivers Net Profit and
IMC also announces the intention to complete a non-brokered private placement of secured debentures.
Q1 2025 Financial Highlights
- Net profit of
$175 K 94% Gross profit increase vs. Q1 2024 of$3.5M $1.8M 29% Gross profit increase vs. Q4 2024 of$2.7M 4% Revenue increase vs. Q1 2024 of$12.5M $12.1M 50% decrease in operating expenses vs. Q1 2024 excluding the one-time Oranim revocation related losses of$3.3M $6.6M 56% decrease including Oranim129% increase of Non-IFRS Adjusted EBITDA profit to$0.6M $2
Management Commentary
"Q1 2025 is a clear inflection point for IMC," said Oren Shuster, Chief Executive Officer of IMC. "Achieving net profitability and an
"IMC's Q1 2025 results mark a major turning point in our financial performance. We achieved net profitability, driven by a
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
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 $6 million - Revenues for the first quarter of 2025 were
$12.5 million $12.1 million 4% . The increase is mainly due to accelerated growth inGermany of$6.6 million Israel of$6.1 million - Gross profit for the first quarter of 2025 was
$3.4 million $1.8 million 94% . - Total operating expenses in Q1 2025 were
$3.3 million $7.4 million 56% . - G&A Expenses in Q1 2025 were
$2 million $2.3 million 14% . - Selling and Marketing Expenses in Q1 2025 were
$1.3 million $2.3 million 44% . - Basic and diluted Profit per Share in Q1 2025 was
$0.09 $2.52 - Non-IFRS Adjusted EBITDA Profit in Q1 2025 was
$0.6 million $2.2 million 129% . - Cash and Cash Equivalents as of March 31, 2025, were
$1.4 million $0.9 million - Total assets as of March 31, 2025, were
$44.9 million $39.2 million 15% . The increase is mainly attributed to an increase of$2.9 million $2.2 million - Total Liabilities as of March 31, 2025, were
$41.8 million $36 16% . The increase is mainly attributed to an increase of$4.9 million $3.7 million $2.4 million
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
The IMC ecosystem operates in
Disclaimer for Forward-Looking Statements
This press release contains forward-looking information or forward-looking statements under applicable Canadian and
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
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
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, | |||||||
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, | |||||
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 | ||||||||||||||
Total other comprehensive income that will not be | 35 | 67 | ||||||||||||
Exchange differences on translation to presentation | - | 1,330 | ||||||||||||
Total other comprehensive income (loss) that will not be | 35 | 1,397 | ||||||||||||
Other comprehensive income that will be | ||||||||||||||
Adjustments arising from translating financial statements | (191) | (35) | ||||||||||||
Total other comprehensive income (loss) that will be | (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 | 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 capital | Reserve from | Conversion | Translation | Accumulated | Total | Non-controlling | Total | |||||||||
Balance as of January 1, 2025 | $ 265,000 | $ 150 | $ 297 | $ (1,265) | $ (258,939) | $ (2,097) | ||||||||||
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) | |||||||||
Share Capital | Reserve from | Translation | Accumulated | Total | Non-controlling | Total | ||||||||
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 | (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 | (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) | (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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