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Exhibit 99.2
 
image00020.jpg

 
NOTICE TO READER
 
The accompanying unaudited condensed interim consolidated financial statements of IM Cannabis Corp. (the “Company”) have been prepared by and are the responsibility of management. The unaudited condensed interim consolidated financial statements have not been reviewed by the Company's auditors.
 
F - 2

 
IM CANNABIS CORP. AND ITS SUBSIDIARIES
 
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
AS OF JUNE 30, 2023
 
CANADIAN DOLLARS IN THOUSANDS
 
(Unaudited)
 
INDEX
 
 
Page
   
F-4 - F-5
   
F-6 - F-7
   
F-8
   
F-9 - F-10
   
F-11 - F-28
 
- - - - - - - - - - -
F - 3

IM CANNABIS CORP. AND ITS SUBSIDIARIES
 
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Canadian Dollars in thousands
 
         
June 30,
2023
   
December 31,
2022
 
   
Note
   
(Unaudited)
       
                   
ASSETS
                 
                   
CURRENT ASSETS:
                 
                   
Cash and cash equivalents
       
$
1,321
   
$
2,449
 
Trade receivables
         
9,701
     
8,684
 
Advances to suppliers
         
1,492
     
1,631
 
Other accounts receivable
         
3,400
     
3,323
 
Inventories
         
14,484
     
16,585
 
                       
           
30,398
     
32,672
 
NON-CURRENT ASSETS:
                     
                       
Property, plant and equipment, net
         
5,235
     
5,221
 
Investments in affiliates
         
2,244
     
2,410
 
Right-of-use assets, net
         
1,457
     
1,929
 
Deferred tax assets, net
         
749
     
763
 
Intangible assets, net
         
6,572
     
7,910
 
Goodwill
         
9,095
     
9,771
 
                       
           
25,352
     
28,004
 
                       
Total assets
       
$
55,750
   
$
60,676
 
 
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
 
F - 4

IM CANNABIS CORP. AND ITS SUBSIDIARIES
 
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Canadian Dollars in thousands
 
         
June 30,
2023
   
December 31,
2022
 
   
Note
   
(Unaudited)
       
                   
LIABILITIES AND EQUITY
                 
                   
CURRENT LIABILITIES:
                 
Trade payables
       
$
9,381
   
$
15,312
 
Bank loans and credit facilities
         
11,477
     
9,246
 
Other accounts payable and accrued expenses
         
4,786
     
6,013
 
Accrued purchase consideration liabilities
         
1,865
     
2,434
 
Current maturities of operating lease liabilities
         
596
     
814
 
                       
           
28,105
     
33,819
 
                       
NON-CURRENT LIABILITIES:
                     
                       
Warrants measured at fair value
 
3
     
3,689
     
8
 
Operating lease liabilities
         
830
     
1,075
 
Long-term loans
         
379
     
399
 
Employee benefit liabilities, net
         
128
     
246
 
Deferred tax liability, net
         
1,081
     
1,332
 
                       
           
6,107
     
3,060
 
                       
Total liabilities
         
34,212
     
36,879
 
                       
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY:
 
4
                 
                       
Share capital and premium
         
248,798
     
245,776
 
Translation reserve
         
1,097
     
1,283
 
Reserve from share-based payment transactions
         
14,617
     
15,167
 
Accumulated deficit
         
(243,597
)
   
(239,574
)
                       
Total equity attributable to equity holders of the Company
         
20,915
     
22,652
 
                       
Non-controlling interests
         
623
     
1,145
 
                       
Total equity
         
21,538
     
23,797
 
                       
Total liabilities and equity
       
$
55,750
   
$
60,676
 
 
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
 
F - 5

IM CANNABIS CORP. AND ITS SUBSIDIARIES
 
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME (UNAUDITED)
Canadian Dollars in thousands, except per share data
 
   
Six months ended
June 30,
   
Three months ended
June 30,
 
   
2023
   
2022(*)
   
2023
   
2022(*)
 
   
(Unaudited)
 
                               
Revenues
 
$
25,736
   
$
25,704
   
$
13,207
   
$
12,703
 
Cost of revenues
   
18,759
     
20,023
     
9,473
     
10,108
 
Gross profit before fair value adjustments
   
6,977
     
5,681
     
3,734
     
2,595
 
                                 
Fair value adjustments:
                               
Unrealized change in fair value of biological assets
   
-
     
(315
)
   
-
     
-
 
Realized fair value adjustments on inventory sold in the period
   
(617
)
   
(760
)
   
(278
)
   
(394
)
Total fair value adjustments
   
(617
)
   
(1,075
)
   
(278
)
   
(394
)
                                 
Gross profit
   
6,360
     
4,606
     
3,456
     
2,201
 
                                 
General and administrative expenses
   
5,563
     
7,284
     
2,389
     
3,337
 
Selling and marketing expenses
   
5,427
     
5,581
     
2,622
     
3,120
 
Restructuring expenses
   
617
     
4,383
     
334
     
636
 
Share-based compensation
   
121
     
1,842
     
(137
)
   
732
 
Total operating expenses
   
11,728
     
19,090
     
5,208
     
7,825
 
                                 
Operating loss
   
5,368
     
14,484
     
1,752
     
5,624
 
                                 
Finance income
   
3,474
     
6,113
     
-
     
3,227
 
Finance expense
   
(2,853
)
   
(3,530
)
   
(2,114
)
   
(2,197
)
Finance income (expenses), net
   
621
     
2,583
     
(2,114
)
   
1,030
 
                                 
Loss from disposal of investment
   
-
     
114
     
-
     
114
 
                                 
Loss before income taxes
   
(4,747
)
   
(12,015
)
   
(3,866
)
   
(4,708
)
Income tax benefit
   
(175
)
   
(1,232
)
   
(160
)
   
(1,007
)
                                 
Net loss from continuing operations
   
(4,572
)
   
(10,783
)
   
(3,706
)
   
(3,701
)
                                 
Net loss from discontinued operations
   
-
     
(18,936
)
   
-
     
(15,277
)
                                 
Net loss
   
(4,572
)
   
(29,719
)
   
(3,706
)
   
(18,978
)
                                 
Other comprehensive income (loss) that will not be reclassified to profit or loss in subsequent periods:
                               
                                 
Remeasurement gain on defined benefit plan
   
36
     
-
     
-
     
-
 
                                 
Exchange differences on translation to presentation currency
   
(661
)
   
(2,942
)
   
(99
)
   
(1,150
)
                                 
Total other comprehensive income that will not be reclassified to profit or loss in subsequent periods
   
(625
)
   
(2,942
)
   
(99
)
   
(1,150
)
                                 
Other comprehensive income that will be reclassified to profit or loss in subsequent periods:
                               
                                 
Adjustments arising from translating financial statements of foreign operation
   
466
     
1,203
     
311
     
345
 
                                 
Total other comprehensive income that will be reclassified to profit or loss in subsequent periods:
   
466
     
1,203
     
311
     
345
 
                                 
Total other comprehensive income (loss)
   
(159
)
   
(1,739
)
   
212
     
(805
)
                                 
Total comprehensive loss
 
$
(4,731
)
 
$
(31,458
)
 
$
(3,494
)
 
$
(19,783
)
 
F - 6

IM CANNABIS CORP. AND ITS SUBSIDIARIES
 
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME (UNAUDITED)
Canadian Dollars in thousands, except per share data
 
         
Six months ended
June 30,
   
Three months ended
June 30,
 
         
2023
   
2022(*)
   
2023
   
2022(*)
 
   
Note
   
Unaudited
 
                                     
Net loss attributable to:
                                   
Equity holders of the Company
       
$
(4,059
)
 
$
(28,117
)
 
$
(3,459
)
 
$
(18,665
)
Non-controlling interests
         
(513
)
   
(1,602
)
   
(247
)
   
(313
)
                                       
         
$
(4,572
)
 
$
(29,719
)
 
$
(3,706
)
 
$
(18,978
)
                                       
Total comprehensive loss attributable to:
                                     
Equity holders of the Company
       
$
(4,209
)
 
$
(29,727
)
 
$
(3,250
)
 
$
(19,437
)
Non-controlling interests
         
(522
)
   
(1,731
)
   
(244
)
   
(346
)
                                       
         
$
(4,731
)
 
$
(31,458
)
 
$
(3,494
)
 
$
(19,783
)
Net income (loss) per share attributable to equity holders of the Company:
 
6
                                 
                                       
Basic loss per share (in CAD)
       
$
(0.33
)
 
$
(4.05
)
 
$
(0.26
)
 
$
(2.72
)
Diluted loss per share (in CAD)
       
$
(0.33
)
 
$
(4.82
)
 
$
(0.26
)
 
$
(3.12
)
                                       
Earnings (loss) per share attributable to equity holders of the Company from continuing operations:
                                     
                                       
Basic loss per share (in CAD)
       
$
(0.33
)
 
$
(1.32
)
 
$
(0.26
)
 
$
(0.49
)
Diluted loss per share (in CAD)
       
$
(0.33
)
 
$
(2.09
)
 
$
(0.26
)
 
$
(0.89
)
                                       
Loss per share attributable to equity holders of the Company from discontinued operations:
                                     
                                       
Basic and diluted loss per share (in CAD)
         
-
   
$
(2.73
)
   
-
   
$
(2.23
)
 
(*) Reclassified in respect of discontinued operations – see Note 8.
 
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
 
F - 7

IM CANNABIS CORP. AND ITS SUBSIDIARIES
 

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)


Canadian Dollars in thousands

 
   
Share
Capital and premium
   
Reserve from share-based payment transactions
   
Translation reserve
   
Accumulated deficit
   
Total
   
Non-controlling interests
   
Total
equity
 
                                           
Balance as of January 1, 2023
 
$
245,776
   
$
15,167
   
$
1,283
   
$
(239,574
)
 
$
22,652
   
$
1,145
   
$
23,797
 
                                                         
Net loss
   
-
     
-
     
-
     
(4,059
)
   
(4,059
)
   
(513
)
   
(4,572
)
Total other comprehensive loss
   
-
     
-
     
(186
)
   
36
     
(150
)
   
(9
)
   
(159
)
                                                         
Total comprehensive loss
   
-
     
-
     
(186
)
   
(4,023
)
   
(4,209
)
   
(522
)
   
(4,731
)
                                                         
Issuance of common shares
   
2,351
     
-
     
-
     
-
     
2,351
     
-
     
2,351
 
Share-based compensation
   
-
     
121
     
-
     
-
     
121
     
-
     
121
 
Expired options
   
671
     
(671
)
   
-
     
-
     
-
     
-
     
-
 
                                                         
Balance as of June 30, 2023
 
$
248,798
   
$
14,617
   
$
1,097
   
$
(243,597
)
 
$
20,915
   
$
623
   
$
21,538
 
 
   
Share capital and premium
   
Treasury stock
   
Reserve for share-based payment transactions
   
Translation reserve
   
Accumulate deficit
   
Total
   
Non-controlling interests
   
Total
equity
 
                                                 
Balance as of January 1, 2022
 
$
237,677
   
$
(660
)
 
$
12,348
   
$
2,614
   
$
(50,743
)
 
$
201,236
   
$
3,709
   
$
204,945
 
                                                                 
Net loss
   
-
     
-
     
-
     
-
     
(28,117
)
   
(28,117
)
   
(1,602
)
   
(29,719
)
Other comprehensive income (loss)
   
-
     
-
     
-
     
(1,610
)
   
-
     
(1,610
)
   
(129
)
   
(1,739
)
                                                                 
Total comprehensive loss
   
-
     
-
     
-
     
(1,610
)
   
(28,117
)
   
(29,727
)
   
(1,731
)
   
(31,458
)
                                                                 
Issuance of common shares
   
3,061
     
-
     
-
     
-
     
-
     
3,061
     
-
     
3,061
 
Exercise of options
   
1,072
     
-
     
(737
)
   
-
     
-
     
335
     
-
     
335
 
Share based payment
   
-
     
-
     
2,658
     
-
     
-
     
2,658
     
-
     
2,658
 
Expired Options
   
27
     
-
     
(27
)
   
-
     
-
     
-
     
-
     
-
 
                                                                 
Balance as of June 30, 2022
 
$
241,837
   
$
(660
)
 
$
14,242
   
$
1,004
   
$
(78,860
)
 
$
177,563
   
$
1,978
   
$
179,541
 
 
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
 
F - 8

IM CANNABIS CORP. AND ITS SUBSIDIARIES
 
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Canadian Dollars in thousands
 
   
Six months ended
June 30,
 
   
2023
   
2022
 
Cash flows from operating activities:
           
             
Net loss for the period
 
$
(4,572
)
 
$
(29,719
)
                 
Adjustments for non-cash items:
               
                 
Unrealized gain on changes in fair value of biological assets
   
-
     
(1,135
)
Fair value adjustment on sale of inventory
   
617
     
2,517
 
Fair value adjustment of warrants measured at fair value and derivative assets
   
(3,304
)
   
(5,697
)
Depreciation of property, plant and equipment
   
337
     
1,762
 
Amortization of intangible assets
   
898
     
1,284
 
Depreciation of right-of-use assets
   
352
     
1,014
 
Finance expenses, net
   
2,683
     
6,527
 
Deferred tax benefit, net
   
(220
)
   
(1,836
)
Share-based payment
   
121
     
2,658
 
Revaluation of other receivable
   
-
     
3,818
 
Loss from disposal of investments
   
-
     
114
 
Restructuring expenses
   
-
     
8,791
 
                 
     
1,484
     
19,817
 
Changes in working capital:
               
                 
Increase in trade receivables, net
   
(2,428
)
   
(4,518
)
Decrease (increase) in other accounts receivable
   
(2,572
)
   
556
 
Decrease in biological assets, net of fair value adjustments
   
-
     
569
 
Decrease (increase) in inventories, net of fair value adjustments
   
1,484
     
(570
)
Increase (decrease) in trade payables
   
(5,078
)    
3,916
 
Decrease in employee benefit liabilities, net
   
(106
)
   
(182
)
Increase (decrease) in other accounts payable and accrued expenses
   
(992
)
   
(337
)
                 
     
(9,692
)
   
(566
)
                 
Taxes paid
   
(432
)
   
(462
)
                 
Net cash used in operating activities
   
(13,212
)
   
(10,930
)
 
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
 
F - 9

IM CANNABIS CORP. AND ITS SUBSIDIARIES
 
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Canadian Dollars in thousands
 
   
Six months ended
June 30,
 
   
2023
   
2022
 
   
Unaudited
 
Cash flows from investing activities:
           
             
Purchase of property, plant and equipment
   
(553
)
   
(1,076
)
Proceeds from sales of property, plant and equipment
   
-
     
201
 
Proceeds from loans receivable
   
-
     
350
 
Investments in associate
   
-
     
(114
)
                 
Net cash used in investing activities
 
$
(553
)
 
$
(639
)
                 
Cash flow from financing activities:
               
                 
Proceeds from issuance of share capital, net of issuance costs
 
$
1,688
   
$
-
 
Proceeds from exercise of options
   
-
     
335
 
Proceeds from issuance of Warrants
   
6,585
     
-
 
Repayment of lease liability
   
(345
)
   
(722
)
Payment of lease liability interest
   
(34
)
   
(859
)
(Repayment) proceeds from bank loan and credit facilities, net
   
(1,060
)
   
8,871
 
Interest paid
   
(124
)
   
(504
)
Proceeds from factoring of checks receivables
   
3,967
     
-
 
                 
Net cash provided by financing activities
   
10,677
     
7,121
 
                 
Effect of foreign exchange on cash and cash equivalents
   
1,960
     
(3,594
)
                 
Increase (decrease) in cash and cash equivalents
   
(1,128
)
   
(8,042
)
Cash and cash equivalents at beginning of the period
   
2,449
     
13,903
 
                 
Cash and cash equivalents at end of the period
 
$
1,321
   
$
5,861
 
                 
Supplemental disclosure of non-cash activities: