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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: