IM Cannabis Reports Q4 and Full-Year 2024 Financial Results

TORONTO and GLIL YAM, Israel — IM Cannabis Corp., an international medical cannabis company, reported financial results for the fourth quarter and year ended December 31, 2024. Unless otherwise stated, all amounts are reported in Canadian dollars and are compared to the quarter ended December 31, 2023.

The company’s financial statements for the year ending December 31, 2024, includes a note regarding the company’s ability to continue as a going concern. The Company’s Q4 2024 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.

Annual and Q4 2024 financial highlights

• +25% increase in Q4 Revenue vs Q4 2023 and 11% increase annually.
• $0.5M profit Non-IFRS Adjusted EBITDA in Q4 2024 vs. Losses of $4.3M in Q4 2023. 87% losses decrease in 2024 to $1.1M vs. $8.0M in 2023.
• +183% increase in IMC Germany Revenue 2024 vs 2023, for a total of $15.5M in 2024 vs $5.5M in 2023.
• -42% decrease in operating expenses in Q4 2024 vs. Q4 2023, and 17% decrease annually in 2024 to $18.7M vs. $22.6M in 2023.

Management commentary

“When looking at 2024, while I am very proud of the 183% growth IMC delivered in Germany, I am delighted with the progress we made internally both strategically and operationally,” said Oren Shuster, chief executive officer. “In Q4, with our positive adjusted EBITDA of $0.5M, we are starting to see the initial impact of the savings we initiated during 2024 through our active cost management and full integration. This gives us a very strong foundation leading into 2025, where we anticipate that Q1 will be the best quarter in sales we have had to date in Germany.”

“The consolidated profit & loss analysis reveals significant improvements in the Company’s financial performance. Despite the temporary impact of inventory clearance on gross profit, the substantial 17% reduction in operating expenses has driven meaningful improvement in operating results,” stated Uri Birenberg, chief financial officer. “The Q4 2024 results, with an adjusted EBITDA profit, indicate that the Company has reached an important point in its financial trajectory, with further improvements anticipated as the benefit of inventory clearance and operational efficiencies continue to materialize.”

Annual and Q4 2024 financial results

Revenues for 2024 and 2023 were $54.0M and $48.8M, respectively, representing an increase of $5.2M or 11%. The increase is mainly attributed to accelerated growth in Germany’s revenue of $10.0M or 183% and decreased net Revenue in Israel of $4.8M. The decrease in Israel is attributed to the cancellation of the Oranim deal, which resulted in a decrease in revenue of approximately $8.5M compared to 2023. Revenues for the three months ended on December 31, 2024, and 2023 were $13.3M and $10.7M, respectively, representing an increase of $2.6M or 25%. The increase is mainly attributed to accelerated growth in Germany’s revenue of $3.7M and decreased net Revenue in Israel of $1.1M. The decrease in Israel is attributed to the cancellation of the Oranim deal, which resulted in a reduced Revenue of $3.4M compared to the three months ended December 31, 2023.

Gross profit for 2024 and 2023 was $8.5M and $9.8M, respectively, representing a decrease of $1.4M or 14%, mainly attributed to a one-time inventory clearance of approximately $3.8M. Gross profit for the three months ended December 31, 2024, and 2023 was $2.7M and $0.8M, respectively, representing an increase of $1.8M or 219%.

G&A Expenses in 2024 and 2023 were $8.0M and $11.0M, respectively, representing a decrease of $3.0M or 27%. G&A expenses for the three months ended December 31, 2024, and 2023 were $1.2M and $3.3M, respectively, representing a decrease of $2.1M or 64%.

Selling and Marketing Expenses in 2024 and 2023 were $7.1M and $10.8M, respectively, representing a decrease of $3.7M or 34%. Selling and marketing expenses for the three months ended December 31, 2024, and 2023 were $1.8M and $2.8M, respectively.

Other operating expenses in 2024 and 2023 were $3.2M and $nil, respectively, due to one-time Oranim revocation expenses of $2.7M and goodwill impairment of $0.5M. Other operating expenses for the three months ended December 31, 2024, and 2023 were $0.5M and $nil, respectively.

Total operating expenses in 2024 were $18.7M compared to $22.6M in 2023, a decrease of 17%. Total operating expenses in the fourth quarter of 2024 were $3.5M compared to $6.0M in Q4 2023, a decrease of 42%.

The Company’s Adjusted EBITDA loss in 2024 decreased by 87% VS. 2023 from $8.0M to $1.1M, representing the improvement of the Company’s operations in 2024 compared to 2023 and the continuing efficiency improvement. In 2024, the Company cleared old balances as a one-time Inventory clearance of approximately $3.9M and had a one-time expense due to the Oranim agreement revocation of $2.7M. The Company’s Adjusted EBITDA gain for the three months ending December 31, 2024, was $0.5M vs. losses of $4.3M in Q4 2023.

Net Loss from continuing operations in 2024 was $11.8M, compared to $10.2M in 2023. Net Loss from continuing operations in the fourth quarter of 2024 was $1.2M, compared to a Net Loss of $3.5M in the fourth quarter of 2023.

Basic Income (Loss) per Common Share in 2024 and 2023 were $(4.51) and $(4.45) per Common Share, respectively. Basic Loss per Common Share in Q4 2024 and 2023 were $(0.32) and $(1.47) per Common Share, respectively.

Diluted net loss per share in 2024 and 2023 were $(4.51) and $(4.45), respectively. Diluted net loss in Q4 2024 and 2023 were $(0.32) and $(1.47) respectively.

Cash and Cash Equivalents as of December 31, 2024, were $0.9M compared to $1.8M in December 31, 2023.

Total assets as of December 31, 2024, were $39.2M, compared to $48.8M as of December 31, 2023, representing a decrease of $9.6M or 19.7%. The decline is mainly attributed to the Oranim agreement cancellation of a total amount of $9.5M, of which is mainly attributed to goodwill at a total amount of $3.5M, intangible assets in the amount of $1.4M, Inventory in the amount of $0.8M, Trade receivables in the amount of $1.3M and Property plant and equipment in the amount of $0.8M. In addition to the Oranim revocation agreement effect, there is a total asset decrease of $0.1M, mainly due to an increase of $7.5M in trade receivables, offset by a $5.9M reduction in Inventory.

Total Liabilities as of December 31, 2024, were $36.0M compared to $35.1M on December 31, 2023, representing an increase of $0.9M or 3%. The change was mainly due to the Oranim agreement cancelation of $6.8M, which was primarily attributed to a decrease in PUT option liability for $2.0M, decrease in purchase consideration payable in the amount of $2.2M and a decrease in trade payables for $1.6M. In addition to the effect of the Oranim deal cancellation, the total liability increased by $7.7M, mainly due to an increase of $3.5M in trade payables, $2.0M due to convertible debentures and $1.3M from warrants liabilities and pre-funded warrants, offset by a decrease $1.1M in other accounts payable. An increased liability of 2.1M is in Credit from bank institutions and others.

About IM Cannabis Corp.

IM Cannabis Corp. (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 its commercial relationship with 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.