Page
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Report of Independent Registered Public Accounting Firm (PCAOB ID: 1281)
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F-2
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F-3 – F-4
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F-5 – F-6
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F-7 – F-8
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F-9 – F-11
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F-12 – F-81
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![]() |
Kost Forer Gabbay & Kasierer
144 Menachem Begin Road, Building A,
Tel-Aviv 6492102, Israel
|
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
|
KOST FORER GABBAY & KASIERER
|
A Member of Ernst & Young Global
|
We have served as the Company's auditor since 2018.
|
Tel-Aviv, Israel
|
March 29, 2023
|
December 31,
|
|||||||||||
Note
|
2022
|
2021
|
|||||||||
ASSETS
|
|||||||||||
CURRENT ASSETS:
|
|||||||||||
Cash and cash equivalents
|
$
|
2,449
|
$
|
13,903
|
|||||||
Trade receivables
|
6
|
8,684
|
16,711
|
||||||||
Advances to suppliers
|
1,631
|
2,300
|
|||||||||
Other accounts receivable
|
7
|
3,323
|
14,482
|
||||||||
Loans receivable
|
15e
|
|
-
|
2,708
|
|||||||
Biological assets
|
8
|
-
|
1,687
|
||||||||
Inventory
|
9
|
16,585
|
29,391
|
||||||||
32,672
|
81,182
|
||||||||||
NON-CURRENT ASSETS:
|
|||||||||||
Property, plant and equipment, net
|
10
|
5,221
|
30,268
|
||||||||
Investments in affiliates
|
15c
|
|
2,410
|
2,429
|
|||||||
Advance payment for intangible assets of pharmacy
|
5
|
-
|
3,129
|
||||||||
Derivative assets
|
-
|
14
|
|||||||||
Right-of-use assets, net
|
12
|
1,929
|
18,162
|
||||||||
Deferred tax assets, net
|
17
|
763
|
16
|
||||||||
Intangible assets, net
|
5, 11
|
7,910
|
30,885
|
||||||||
Goodwill
|
5, 11
|
9,771
|
121,303
|
||||||||
28,004
|
206,206
|
||||||||||
Total assets
|
$
|
60,676
|
$
|
287,388
|
December 31,
|
|||||||||||
Note
|
2022
|
2021
|
|||||||||
LIABILITIES AND EQUITY
|
|||||||||||
CURRENT LIABILITIES:
|
|||||||||||
Trade payables
|
$
|
15,312
|
$
|
13,989
|
|||||||
Bank loans and others
|
1
|
9,246
|
9,502
|
||||||||
Other accounts payable and accrued expenses
|
14
|
6,013
|
20,143
|
||||||||
Accrued purchase consideration liabilities
|
5
|
2,434
|
6,039
|
||||||||
Current maturities of operating lease liabilities
|
12
|
814
|
1,554
|
||||||||
33,819
|
51,227
|
||||||||||
NON-CURRENT LIABILITIES:
|
|||||||||||
Warrants measured at fair value
|
15
|
8
|
6,022
|
||||||||
Operating lease liabilities
|
12
|
1,075
|
17,820
|
||||||||
Long-term loans
|
399
|
392
|
|||||||||
Employee benefit liabilities, net
|
13
|
246
|
391
|
||||||||
Deferred tax liability, net
|
17
|
1,332
|
6,591
|
||||||||
3,060
|
31,216
|
||||||||||
Total liabilities
|
36,879
|
82,443
|
|||||||||
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY:
|
18
|
||||||||||
Share capital and premium
|
245,776
|
237,677
|
|||||||||
Treasury Stock
|
-
|
|
(660
|
)
|
|||||||
Translation reserve
|
1,283
|
2,614
|
|||||||||
Reserve from share-based payment transactions
|
15,167
|
12,348
|
|||||||||
Accumulated deficit
|
239,574
|
)
|
(50,743
|
)
|
|||||||
Total equity attributable to shareholders of the Company
|
22,652
|
201,236
|
|||||||||
Non-controlling interests
|
1,145
|
3,709
|
|||||||||
Total equity
|
23,797
|
204,945
|
|||||||||
Total equity and liabilities
|
$
|
60,676
|
$
|
287,388
|
March 29, 2023
|
/s/ Marc Lustig
|
/s/ Oren Shuster
|
/s/ Shai Shemesh
|
|||
Date of approval of the
|
Marc Lustig
|
Oren Shuster
|
Shai Shemesh
|
|||
financial statements
|
Chairman of the Board
|
Chief Executive Officer
|
Chief Financial Officer
|
Year ended
December 31,
|
|||||||||||||||
Note
|
2022
|
2021 (*)
|
|
2020
|
|||||||||||
Revenues
|
$
|
54,335
|
$
|
34,053
|
$
|
15,890
|
|||||||||
Cost of revenues
|
43,044
|
25,458
|
7,081
|
||||||||||||
Gross profit before fair value adjustments
|
11,291
|
8,595
|
8,809
|
||||||||||||
Fair value adjustments:
|
|||||||||||||||
Unrealized change in fair value of biological assets
|
(315
|
)
|
6,308
|
11,781
|
|||||||||||
Realized fair value adjustments on inventory sold in the year
|
(1,814
|
)
|
(8,570
|
)
|
(10,122
|
)
|
|||||||||
Total fair value adjustments
|
(2,129
|
)
|
(2,262
|
)
|
1,659
|
||||||||||
Gross profit after fair value adjustments
|
9,162
|
6,333
|
10,468
|
||||||||||||
General and administrative expenses
|
21,460
|
17,221
|
11,549
|
||||||||||||
Selling and marketing expenses
|
11,473
|
6,725
|
3,782
|
||||||||||||
Restructuring expenses
|
1
|
4,383
|
-
|
-
|
|||||||||||
Share-based compensation
|
18
|
2,637
|
5,422
|
3,382
|
|||||||||||
Total operating expenses
|
39,953
|
29,368
|
18,713
|
||||||||||||
Operating loss
|
(30,791
|
)
|
(23,035
|
)
|
(8,245
|
)
|
|||||||||
Finance income
|
15
|
6,703
|
23,544
|
277
|
|||||||||||
Finance expenses
|
(1,972
|
)
|
(673
|
)
|
(20,504
|
)
|
|||||||||
Finance income (expense), net
|
4,731
|
22,871
|
(20,227
|
)
|
|||||||||||
Loss before income taxes
|
(26,060
|
)
|
(164
|
)
|
(28,472
|
)
|
|||||||||
Income tax expense (benefit)
|
17
|
(1,138
|
)
|
500
|
262
|
||||||||||
Net loss from continuing operations
|
(24,922
|
)
|
(664
|
)
|
(28,734
|
)
|
|||||||||
Net loss from discontinued operations, net of tax
|
24 |
(166,379
|
)
|
(17,854
|
)
|
-
|
|||||||||
Net loss
|
$
|
(191,301
|
)
|
$
|
(18,518
|
)
|
$
|
(28,734
|
)
|
Year ended
December 31,
|
|||||||||||||||
Note
|
2022
|
2021 (*)
|
|
2020
|
|||||||||||
Other comprehensive income that will not be reclassified to profit or loss in subsequent periods:
|
|||||||||||||||
Remeasurement gain (loss) on defined benefit plans
|
59
|
21
|
(30
|
)
|
|||||||||||
Exchange differences on translation to presentation currency
|
(1,238
|
)
|
858
|
1,144
|
|||||||||||
Total other comprehensive income that will not be reclassified to profit or loss in subsequent periods
|
(1,179
|
)
|
879
|
1,114
|
|||||||||||
Other comprehensive income that will be reclassified to profit or loss in subsequent periods:
|
|||||||||||||||
Adjustments arising from translating financial statements of foreign operation
|
(246
|
)
|
530
|
(124
|
)
|
||||||||||
Total other comprehensive income (loss)
|
(1,425
|
)
|
1,409
|
990
|
|||||||||||
Total comprehensive loss
|
(192,726
|
)
|
(17,109
|
)
|
(27,744
|
)
|
|||||||||
Net loss attributable to:
|
|||||||||||||||
Equity holders of the Company
|
(188,890
|
)
|
(17,763
|
)
|
(28,698
|
)
|
|||||||||
Non-controlling interests
|
(2,411
|
)
|
(755
|
)
|
(36
|
)
|
|||||||||
(191,301
|
)
|
(18,518
|
)
|
(28,734
|
)
|
||||||||||
Total comprehensive income (loss) attributable to:
|
|||||||||||||||
Equity holders of the Company
|
(190,162
|
)
|
(16,357
|
)
|
(27,808
|
)
|
|||||||||
Non-controlling interests
|
(2,564
|
)
|
(752
|
)
|
64
|
||||||||||
$
|
(192,726
|
)
|
$
|
(17,109
|
)
|
$
|
(27,744
|
)
|
|||||||
Earnings (loss) per share attributable to equity holders of the Company from continuing operations:
|
20
|
||||||||||||||
Basic earnings (loss) per share (in CAD)
|
$
|
(3.13
|
)
|
$
|
0.02
|
$
|
(1.9
|
)
|
|||||||
Diluted loss per share (in CAD)
|
$
|
(3.81
|
)
|
$
|
(3.62
|
)
|
$
|
(1.9
|
)
|
||||||
Loss per share attributable to equity holders of the Company from discontinued operations:
|
|||||||||||||||
Basic and diluted loss per share (in CAD)
|
$
|
(23.17
|
)
|
$
|
(3.08
|
)
|
$
|
-
|
|||||||
Loss per share attributable to equity holders of the Company from net loss:
|
|||||||||||||||
Basic earnings (loss) per share (in CAD)
|
$
|
(26.3
|
)
|
$
|
(3.06
|
)
|
$
|
(1.9
|
)
|
||||||
Diluted loss per share (in CAD)
|
$
|
(26.98
|
)
|
$
|
(6.7
|
)
|
$
|
(1.9
|
)
|
Share capital and premium*)
|
Treasury Stock
|
Reserve from share-based payment transactions
|
Translation reserve
|
Accumulated deficit
|
Total
|
Non-controlling interests
|
Total
equity
|
|||||||||||||||||||||||||
Balance as of January 1, 2020
|
$
|
25,947
|
$
|
-
|
$
|
2,677
|
$
|
309
|
$
|
(4,273
|
)
|
$
|
24,660
|
$
|
1,449
|
$
|
26,109
|
|||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(28,698
|
)
|
(28,698
|
)
|
(36
|
)
|
(28,734
|
)
|
||||||||||||||||||||
Total other comprehensive income (loss)
|
-
|
-
|
-
|
920
|
(30
|
)
|
890
|
100
|
990
|
|||||||||||||||||||||||
Total comprehensive income (loss)
|
-
|
-
|
-
|
920
|
(28,728
|
)
|
(27,808
|
)
|
64
|
(27,744
|
)
|
|||||||||||||||||||||
Exercise of warrants and compensation options
|
10,251
|
-
|
-
|
-
|
-
|
10,251
|
-
|
10,251
|
||||||||||||||||||||||||
Exercise of options
|
834
|
-
|
(222
|
)
|
-
|
-
|
612
|
-
|
612
|
|||||||||||||||||||||||
Share-based compensation
|
-
|
-
|
3,382
|
-
|
-
|
3,382
|
-
|
3,382
|
||||||||||||||||||||||||
Expired options
|
8
|
-
|
(8
|
)
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
Balance as of January 1, 2021
|
$
|
37,040
|
$
|
-
|
$
|
5,829
|
$
|
1,229
|
$
|
(33,001
|
)
|
$
|
11,097
|
$
|
1,513
|
$
|
12,610
|
|||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(17,763
|
)
|
(17,763
|
)
|
(755
|
)
|
(18,518
|
)
|
||||||||||||||||||||
Total other comprehensive income
|
-
|
-
|
-
|
1,385
|
21
|
1,406
|
3
|
1,409
|
||||||||||||||||||||||||
Total comprehensive income (loss)
|
-
|
-
|
-
|
1,385
|
(17,742
|
)
|
(16,357
|
)
|
(752
|
)
|
(17,109
|
)
|
||||||||||||||||||||
Issuance of common shares, net of issuance costs of $3,800
|
195,259
|
-
|
-
|
-
|
-
|
195,259
|
2,948
|
198,207
|
||||||||||||||||||||||||
Purchase of treasury common shares
|
-
|
(660
|
)
|
-
|
-
|
-
|
(660
|
)
|
-
|
(660
|
)
|
|||||||||||||||||||||
Exercise of warrants and compensation options
|
4,293
|
-
|
-
|
-
|
-
|
4,293
|
-
|
4,293
|
||||||||||||||||||||||||
Exercise of options
|
1,053
|
-
|
(920
|
)
|
-
|
-
|
133
|
-
|
133
|
|||||||||||||||||||||||
Share-based compensation
|
-
|
-
|
7,471
|
-
|
-
|
7,471
|
-
|
7,471
|
||||||||||||||||||||||||
Expired options
|
32
|
-
|
(32
|
)
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
Balance as of December 31, 2021
|
$
|
237,677
|
$
|
(660
|
)
|
$
|
12,348
|
$
|
2,614
|
$
|
(50,743
|
)
|
$
|
201,236
|
$
|
3,709
|
$
|
204,945
|
Share capital and premium*)
|
Treasury Stock
|
Reserve from share-based payment transactions
|
Translation reserve
|
Accumulated 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
|
-
|
-
|
-
|
-
|
(188,890
|
)
|
(188,890
|
)
|
(2,411
|
)
|
(191,301
|
)
|
||||||||||||||||||||
Total other comprehensive income (loss)
|
-
|
-
|
-
|
(1,331
|
)
|
59
|
(1,272
|
)
|
(153
|
)
|
(1,425
|
)
|
||||||||||||||||||||
Total comprehensive loss
|
-
|
-
|
-
|
(1,331
|
)
|
(188,831
|
)
|
(190,162
|
)
|
(2,564
|
)
|
(192,726
|
)
|
|||||||||||||||||||
Issuance of treasury common shares
|
-
|
660
|
-
|
-
|
-
|
660
|
-
|
660
|
||||||||||||||||||||||||
Issuance of shares, net of issuance costs of $178
|
6,818
|
-
|
-
|
-
|
-
|
6,818
|
-
|
6,818
|
||||||||||||||||||||||||
Exercise of options
|
992
|
-
|
(659
|
)
|
-
|
-
|
333
|
-
|
333
|
|||||||||||||||||||||||
Share-based compensation
|
-
|
-
|
3,767
|
-
|
-
|
3,767
|
-
|
3,767
|
||||||||||||||||||||||||
Expired options
|
289
|
-
|
(289
|
)
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
Balance as of December 31, 2022
|
$
|
245,776
|
$
|
-
|
$
|
15,167
|
$
|
1,283
|
$
|
(239,574
|
)
|
$
|
22,652
|
$
|
1,145
|
$
|
23,797
|
Year ended
December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Cash provided from operating activities:
|
||||||||||||
Net loss
|
$
|
(191,301
|
)
|
$
|
(18,518
|
)
|
$
|
(28,734
|
)
|
|||
Adjustments for non-cash items:
|
||||||||||||
Unrealized gain on changes in fair value of biological assets
|
(84
|
)
|
(7,210
|
)
|
(11,781
|
)
|
||||||
Fair value adjustment on sale of inventory
|
4,342
|
8,796
|
10,122
|
|||||||||
Fair value adjustment on Warrants, Investments, and Accounts Receivable
|
(6,000
|
)
|
(21,638
|
)
|
20,155
|
|||||||
Depreciation of property, plant and equipment
|
3,044
|
3,021
|
690
|
|||||||||
Amortization of intangible assets
|
2,343
|
1,158
|
31
|
|||||||||
Depreciation of right-of-use assets
|
1,944
|
1,550
|
209
|
|||||||||
Impairment of goodwill
|
107,854
|
275
|
-
|
|||||||||
Impairment of property, plant and equipment
|
2,277
|
-
|
-
|
|||||||||
Impairment of intangible assets
|
7,199
|
-
|
-
|
|||||||||
Impairment of right-of-use assets
|
1,914
|
-
|
-
|
|||||||||
Finance income, net
|
6,532
|
1,262
|
72
|
|||||||||
Deferred tax payments (benefit), net
|
(3,004
|
)
|
278
|
(66
|
)
|
|||||||
Share-based payments
|
3,767
|
7,471
|
3,382
|
|||||||||
Share based acquisition costs related to business combination
|
-
|
807
|
-
|
|||||||||
Revaluation of other accounts receivable
|
3,982
|
-
|
-
|
|||||||||
Restructuring expenses
|
8,757
|
-
|
-
|
|||||||||
144,867
|
(4,230
|
)
|
22,814
|
|||||||||
Changes in non-cash working capital:
|
||||||||||||
Increase (decrease) in trade receivables, net
|
6,058
|
(6,602
|
)
|
(3,534
|
)
|
|||||||
Increase (decrease) in other accounts receivable and advances to suppliers
|
3,622
|
845
|
(1,029
|
)
|
||||||||
Decrease in biological assets, net of fair value adjustments
|
565
|
6,412
|
11,771
|
|||||||||
Increase (decrease) in inventory, net of fair value adjustments
|
883
|
(19,707
|
)
|
(12,729
|
)
|
|||||||
Increase in trade payables
|
11,284
|
5,573
|
2,135
|
|||||||||
Changes in employee benefit liabilities, net
|
(63
|
)
|
28
|
59
|
||||||||
Increase in other accounts payable and accrued expenses
|
12,126
|
2,661
|
1,929
|
|||||||||
34,475
|
(10,790
|
)
|
(1,398
|
)
|
||||||||
Taxes paid
|
(681
|
)
|
(834
|
)
|
(601
|
)
|
||||||
Net cash used in operating activities
|
(12,640
|
)
|
(34,372
|
)
|
(7,919
|
)
|
Year ended
December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Cash flows from investing activities:
|
||||||||||||
Purchase of property, plant and equipment
|
$
|
(1,562
|
)
|
$
|
(4,578
|
)
|
$
|
(2,617
|
)
|
|||
Proceeds from sales of property, plant and equipment
|
210
|
-
|
-
|
|||||||||
Proceeds from loans receivable
|
350
|
7,796
|
-
|
|||||||||
Purchase of intangible assets
|
-
|
(17
|
)
|
(93
|
)
|
|||||||
Acquisition of businesses, net of cash acquired
|
-
|
(12,536
|
)
|
-
|
||||||||
Deconsolidation of subsidiary (see Note 24)
|
(406
|
)
|
-
|
-
|
||||||||
Investments in financial assets
|
-
|
(13
|
)
|
(1,347
|
)
|
|||||||
Proceeds from sale of investment
|
-
|
319
|
-
|
|||||||||
Proceeds from (investment in) restricted deposits
|
-
|
17
|
(18
|
)
|
||||||||
Net cash used in investing activities
|
(1,408
|
)
|
(9,012
|
)
|
(4,075
|
)
|
||||||
Cash provided by financing activities:
|
||||||||||||
Proceeds from issuance of share capital, net of issuance costs
|
3,756
|
28,131
|
-
|
|||||||||
Proceeds from issuance of warrants measured at fair value
|
-
|
11,222
|
-
|
|||||||||
Proceeds from exercise of warrants
|
-
|
3,682
|
6,378
|
|||||||||
Proceeds from exercise of options
|
333
|
133
|
612
|
|||||||||
Repayment of lease liability
|
(1,656
|
)
|
(633
|
)
|
(182
|
)
|
||||||
Payment of lease liability interest
|
(1,429
|
)
|
(1,347
|
)
|
(68
|
)
|
||||||
Proceeds from loans
|
9,636
|
7,804
|
-
|
|||||||||
Repayment of loans
|
(4,976
|
)
|
-
|
-
|
||||||||
Interest paid
|
(902
|
)
|
(261
|
)
|
-
|
|||||||
Net cash provided by financing activities
|
4,762
|
48,731
|
6,740
|
Year ended
December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Effect of foreign exchange on cash and cash equivalents
|
$
|
(2,168
|
)
|
$
|
(329
|
)
|
$
|
213
|
||||
Increase (decrease) in cash and cash equivalents
|
(11,454
|
)
|
5,018
|
(5,041
|
)
|
|||||||
Cash and cash equivalents at beginning of year
|
13,903
|
8,885
|
13,926
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
2,449
|
$
|
13,903
|
$
|
8,885
|
||||||
Supplemental disclosure of non-cash activities:
|
||||||||||||
Right-of-use asset recognized with corresponding lease liability
|
$
|
613
|
$
|
1,678
|
$
|
107
|
||||||
Conversion of warrant and compensation options into common shares
|
$
|
-
|
$
|
611
|
$
|
-
|
||||||
Issuance of shares in payment of purchase consideration liability
|
$
|
3,061
|
$
|
-
|
$
|
-
|
NOTE 1:- |
GENERAL
|
a. |
Corporate information:
|
NOTE 1:-
|
GENERAL (Cont.)
|
NOTE 1:-
|
GENERAL (Cont.)
|
NOTE 1:-
|
GENERAL (Cont.)
|
NOTE 1:-
|
GENERAL (Cont.)
|
b. |
Approval of consolidated financial statements:
|
c. |
Definitions:
|
The Company, or IMCC
|
-
|
IM Cannabis Corp.
|
The Group
|
-
|
IM Cannabis Corp., its Subsidiaries
|
Subsidiaries
|
-
|
Companies that are controlled by the Company (as defined in IFRS 10) and whose accounts are consolidated with those of the Company
|
CAD or $
|
-
|
Canadian Dollar
|
NIS
|
-
|
New Israeli Shekel
|
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES
|
a. |
Basis of presentation:
|
- |
Financial instruments which are presented at fair value through profit or loss.
|
- |
Biological assets which are presented at fair value less cost to sell up to the point of harvest.
|
b. |
Consolidated financial statements:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
Percentage ownership
|
||||||||
Subsidiaries
|
2022
|
2021
|
||||||
I.M.C. Holdings Ltd. (”IMC”)
|
100
|
%
|
100
|
%
|
||||
Focus Medical Herbs Ltd. ("Focus")
|
74
|
%
|
74
|
%
|
||||
I.M.C. Pharma Ltd.
|
100
|
%
|
-
|
|||||
I.M.C.C. Medical Herbs Ltd.
|
100
|
%
|
100
|
%
|
||||
I.M.C Farms Israel Ltd. ("IMC Farms")
|
100
|
%
|
100
|
%
|
||||
I.M.C Ventures Ltd. ("IMC Ventures")
|
75
|
%
|
75
|
%
|
||||
I.M.C - International Medical Cannabis Portugal Unipessoal Lda) ***)
|
-
|
100
|
%
|
|||||
Adjupharm GmbH (“Adjupharm”)
|
90.02
|
%
|
90.02
|
%
|
||||
R.A. Yarok Pharm Ltd. (“Pharm Yarok”)
|
100
|
%
|
100
|
%
|
||||
Rosen High Way Ltd. (“Rosen High Way”)
|
100
|
%
|
100
|
%
|
||||
High Way Shinua Ltd. (“HW Shinua”)
|
100
|
%
|
100
|
%
|
||||
Revoly Trading and Marketing Ltd. (“Vironna”)
|
51
|
%
|
51
|
%
|
||||
Oranim Plus Pharm LTD.
|
51.3
|
%
|
51.3
|
%
|
||||
Oranim Pharm
|
51
|
%
|
51
|
%
|
||||
Trichome Financial Corp. (“Trichome”)
|
**) |
|
100
|
%
|
||||
Trichome Financial Cannabis GP Inc.
|
**)
|
|
100
|
%
|
||||
Trichome Financial Cannabis Manager Inc.
|
**)
|
100
|
%
|
|||||
Trichome Asset Funding Corp.
|
**) |
|
100
|
%
|
||||
Trichome JWC Acquisition Corp. (“TJAC”)
|
**) |
|
100
|
%
|
||||
Trichome Retail Corp.
|
**)
|
|
100
|
%
|
||||
MYM Nutraceuticals Inc. (“MYM”)
|
**)
|
|
100
|
%
|
||||
SublimeCulture Inc.
|
**)
|
|
100
|
%
|
||||
CannaCanada Inc.
|
**)
|
|
100
|
%
|
||||
MYM International Brands Inc.
|
**)
|
|
100
|
%
|
||||
Highland Grow Inc.
|
**)
|
|
100
|
%
|
*) |
The Company does not hold directly interest or voting rights in Focus. The Company's wholly-owned subsidiary holds an option to buy the ownership of the 74% of Focus shares. According to accounting criteria in IFRS 10, the Company is
viewed as effectively exercising control over Focus, and therefore, the accounts of Focus are consolidated with those of the Company.
|
**) |
Deconsolidated effective November 7, 2022, when Trichome filed to commence proceedings under the Companies’ Creditors Arrangement Act (CCAA) (see Note 1).
|
***) |
Dissolved as of December 31, 2022.
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
- |
Derecognizes the subsidiary's assets (including goodwill) and liabilities.
|
- |
Derecognizes the carrying amount of non-controlling interests.
|
- |
Derecognizes the adjustments arising from translating financial statements carried to equity.
|
- |
Recognizes the fair value of the consideration received.
|
- |
Recognizes the fair value of any remaining investment.
|
- |
Reclassifies the components previously recognized in other comprehensive income (loss) on the same basis as would be required if the subsidiary had directly disposed of the related assets or liabilities.
|
- |
Recognizes any resulting difference (surplus or deficit) as gain or loss.
|
c. |
Business combinations and goodwill:
|
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
d. |
Functional currency, presentation currency and foreign currency:
|
1. |
Functional currency and presentation currency:
|
2. |
Transactions, assets and liabilities in foreign currency:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
e. |
Cash equivalents:
|
f. |
Fair value measurement:
|
Level 1
|
-
|
quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
Level 2
|
-
|
inputs other than quoted prices included within Level 1 that are observable directly or indirectly.
|
Level 3
|
-
|
inputs that are not based on observable market data (valuation techniques which use inputs that are not based on observable market data).
|
NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
g. |
Biological assets:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
h. |
Inventory:
|
i. |
Property, plant and equipment, net:
|
%
|
Mainly %
|
|||||
Buildings
|
3
|
3
|
||||
Greenhouse production equipment
|
7 - 25
|
20
|
||||
Greenhouse structure
|
12.5
|
12.5
|
||||
Motor vehicles
|
15
|
15
|
||||
Computer, software and equipment
|
20 - 33
|
33
|
||||
Leasehold improvements
|
See below
|
See below
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
j. |
Intangible assets:
|
Years
|
||
Customer relationship
|
5-8
|
|
Brand name
|
9
|
|
Other intangibles
|
9
|
k. |
Impairment of non-financial assets:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
l. |
Revenue recognition:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
a) |
The reason for the bill-and-hold arrangement is substantive (for example, the customer has requested the arrangement);
|
b) |
The product is identified separately as belonging to the customer;
|
c) |
The product currently is ready for physical delivery to the customer;
|
d) |
The Group does not have the ability to use the product by selling it or delivering it to another customer.
|
m. |
Leases:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
n. |
Financial instruments:
|
1. |
Financial assets:
|
- |
The Group’s business model for managing financial assets; and
|
- |
The contractual cash flow terms of the financial asset.
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
- |
The contractual rights to the cash flows from the financial asset has expired; or
|
- |
The Group has transferred substantially all the risks and rewards deriving from the contractual rights to receive cash flows from the financial asset or has neither transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset; or
|
- |
The Group has retained its contractual rights to receive cash flows from the financial asset but has assumed a contractual obligation to pay the cash flows in full without material delay to a third party.
|
2. |
Financial liabilities:
|
3. |
Issue of a unit of securities:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
o. |
Employee benefit liabilities:
|
1. |
Short-term employee benefits:
|
2. |
Post-employment benefits:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
p. |
Share-based payment transactions:
|
q. |
Provisions:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
r. |
Taxes on income:
|
s. |
Earnings per share:
|
t. |
Treasury shares:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
u. |
Operating segments:
|
v. |
Discontinued operations:
|
NOTE 3:- |
SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS USED IN THE PREPARATION OF THE FINANCIAL STATEMENTS
|
a. |
Judgments:
|
- |
Determining the fair value of share-based payment transactions:
|
- |
Discount rate for a lease liability:
|
NOTE 3:- |
SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS USED IN THE PREPARATION OF THE FINANCIAL STATEMENTS (Cont.)
|
b. |
Estimates and assumptions:
|
- |
Legal claims:
|
- |
Deferred tax assets:
|
- |
Impairment of goodwill:
|
NOTE 3:- |
SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS USED IN THE PREPARATION OF THE FINANCIAL STATEMENTS (Cont.)
|
- |
Determining the fair value of an unquoted financial assets and liabilities:
The fair value of unquoted financial assets in Level 3 of the fair value hierarchy is determined using valuation techniques, generally using future cash flows discounted at current rates applicable for items
with similar terms and risk characteristics. changes in estimated future cash flows and estimated discount rates, after consideration of risks such as liquidity risk, credit risk and volatility, are liable to affect the fair value of
these assets.
|
- |
Loss of control of subsidiary
On November 7, 2022, Trichome filed a petition with the Superior Court of Ontario for protection under the Companies’ Creditors Arrangement Act (“CCAA”) in order
to restructure its business and financial affairs. Management applied judgement in assessing whether this event represented a loss of control of Trichome. On filing of CCAA, which included a request for an order to approve a sale and
investment solicitation process and to approve a stalking horse agreement of purchase and sale, management concluded that the Company ceased to have the power to direct the relevant activity of Trichome because substantive rights were
granted to other parties through the CCAA proceedings that restricted the decision making ability of the Company to the extent that the Company was unable to demonstrate power over Trichome. As a result, the Company accounted for a loss
in control and Trichome was deconsolidated on November 17, 2022 (see Note 1 and Note 24).
|
NOTE 4:- |
DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO THEIR ADOPTION
|
a. |
Amendment to IAS 1, "Presentation of Financial Statements":
|
• |
Only covenants with which an entity must comply on or before the reporting date will affect a liability's classification as current or non-current.
|
• |
An entity should provide disclosure when a liability arising from a loan agreement is classified as non-current and the entity's right to defer settlement is contingent on compliance with future covenants within twelve months from the
reporting date. This disclosure is required to include information about the covenants and the related liabilities. The disclosures must include information about the nature of the future covenants and when compliance is applicable, as well
as the carrying amount of the related liabilities. The purpose of this information is to allow users to understand the nature of the future covenants and to assess the risk that a liability classified as non-current could become repayable
within twelve months. Furthermore, if facts and circumstances indicate that an entity may have difficulty in complying with such covenants, those facts and circumstances should be disclosed.
|
b. |
Amendment to IAS 8, "Accounting Policies, Changes to Accounting Estimates and Errors":
|
NOTE 4:- |
DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO THEIR ADOPTION (Cont.)
|
c. |
Amendment to IAS 12, "Income Taxes":
|
d. |
Amendment to IAS 1, "Disclosure of Accounting Policies":
|
NOTE 5:- |
BUSINESS COMBINATIONS
|
NOTE 5:-
|
BUSINESS COMBINATIONS (Cont.)
|
NOTE 5:-
|
BUSINESS COMBINATIONS (Cont.)
|
Proforma results for the year ended
December 31,
2021
|
||||
Revenues
|
$
|
55,563
|
||
Net loss
|
$
|
(25,372
|
)
|
NOTE 5:-
|
BUSINESS COMBINATIONS (Cont.)
|
Proforma results for the year ended
December 31,
2021
|
||||
Revenues
|
$
|
61,639
|
||
Net loss
|
$
|
(20,132
|
)
|
NOTE 5:-
|
BUSINESS COMBINATIONS (Cont.)
|
NOTE 5:-
|
BUSINESS COMBINATIONS (Cont.)
|
Preliminary PPA
|
Adjustments
|
Final PPA
|
||||||||||
Inventory
|
$
|
19
|
$
|
-
|
$
|
19
|
||||||
Advance payment for intangible assets of pharmacy
|
2,837
|
3,367
|
6,204
|
|||||||||
Property, plant and equipment
|
88
|
-
|
88
|
|||||||||
Intangible assets
|
776
|
(593
|
)
|
183
|
||||||||
Total identifiable assets
|
3,720
|
2,774
|
6,494
|
|||||||||
Goodwill arising on acquisition
|
3,240
|
(2,774
|
)
|
466
|
||||||||
Total purchase price
|
$
|
6,960
|
$
|
-
|
$
|
6,960
|
NOTE 5:-
|
BUSINESS COMBINATIONS (Cont.)
|
Proforma results for the year ended
December 31,
2021
|
||||
Revenues
|
$
|
58,345
|
||
Net loss
|
$
|
(18,986
|
)
|
NOTE 5:-
|
BUSINESS COMBINATIONS (Cont.)
|
Proforma results for the year ended
December 31,
2021
|
||||
Revenues
|
$
|
56,816
|
||
Net loss
|
$
|
(18,180
|
)
|
NOTE 5:-
|
BUSINESS COMBINATIONS (Cont.)
|
Proforma results for the year ended
December 31,
2021
|
||||
Revenues
|
$
|
67,589
|
||
Net loss
|
$
|
(17,870
|
)
|
NOTE 5:-
|
BUSINESS COMBINATIONS (Cont.)
|
Fair value
|
||||||||||||||||||||||||
TFC
|
MYM
|
Vironna
|
Pharm Yarok
|
Oranim
|
Panaxia
|
|||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Cash and cash equivalents
|
$
|
362
|
$
|
131
|
$
|
57
|
$
|
105
|
$
|
485
|
$
|
-
|
||||||||||||
Trade and other receivables
|
3,240
|
2,548
|
259
|
456
|
1,329
|
-
|
||||||||||||||||||
Indemnification asset
|
8,131
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Biological assets
|
785
|
63
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Inventory
|
3,883
|
4,180
|
639
|
346
|
1,043
|
19
|
||||||||||||||||||
Loan receivable
|
8,470
|
2,122
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Investments
|
-
|
-
|
-
|
-
|
-
|
2,837
|
||||||||||||||||||
Property, plant and equipment
|
15,193
|
6,105
|
210
|
1,145
|
389
|
88
|
||||||||||||||||||
Derivative assets
|
114
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Right of use assets
|
15,037
|
630
|
-
|
-
|
1,312
|
-
|
||||||||||||||||||
Investments
|
319
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Intangible assets
|
6,458
|
17,200
|
2,316
|
974
|
2,991
|
776
|
||||||||||||||||||
Total identifiable assets
|
61,992
|
32,979
|
3,481
|
3,026
|
7,549
|
3,720
|
||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||
Trade and other payables
|
(15,196
|
)
|
(4,442
|
)
|
(854
|
)
|
(1,448
|
)
|
(1,777
|
)
|
-
|
|||||||||||||
Bank loans
|
-
|
(915
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||||
Lease liability
|
(15,037
|
)
|
(873
|
)
|
-
|
-
|
(1,312
|
)
|
-
|
|||||||||||||||
Long term loans
|
-
|
-
|
-
|
(1,042
|
)
|
-
|
-
|
|||||||||||||||||
Deferred tax, net
|
-
|
(4,061
|
)
|
(532
|
)
|
(224
|
)
|
(688
|
)
|
-
|
||||||||||||||
Total identifiable liabilities
|
(30,233
|
)
|
(10,291
|
)
|
(1,386
|
)
|
(2,714
|
)
|
(3,777
|
)
|
-
|
|||||||||||||
Total identifiable assets, net
|
31,759
|
22,688
|
2,095
|
312
|
3,772
|
3,720
|
||||||||||||||||||
Goodwill arising on acquisition
|
67,269
|
39,932
|
2,250
|
4,294
|
2,907
|
3,240
|
||||||||||||||||||
Non-controlling interest
|
-
|
-
|
(1,026
|
)
|
-
|
(1,848
|
)
|
-
|
||||||||||||||||
Total purchase price
|
$
|
99,028
|
$
|
62,620
|
$
|
3,319
|
$
|
4,606
|
$
|
4,831
|
$
|
6,960
|
NOTE 6:- |
TRADE RECEIVABLES
|
NOTE 7:- |
OTHER ACCOUNTS RECEIVABLE
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
Prepaid expenses
|
$
|
1,488
|
$
|
2,715
|
||||
Government authorities
|
1,557
|
2,338
|
||||||
Related parties (see Note 21)
|
83
|
11
|
||||||
Indemnification assets (see Note 5)
|
-
|
2,112
|
||||||
Other receivables
|
195
|
7,304
|
||||||
$
|
3,323
|
$
|
14,482
|
NOTE 8:- |
BIOLOGICAL ASSETS
|
Balance at of January 1, 2021
|
$
|
78
|
||
Additions related to acquisitions of Trichome and MYM
|
848
|
|||
Production costs capitalized
|
10,454
|
|||
Changes in fair value less cost to sell due to biological transformation
|
7,210
|
|||
Transferred to inventory upon harvest
|
(16,977
|
)
|
||
Foreign exchange translation
|
74
|
|||
Balance at of December 31, 2021
|
1,687
|
|||
Production costs capitalized
|
7,744
|
|||
Changes in fair value less cost to sell due to biological transformation
|
84 | |||
Transferred to inventory upon harvest
|
(9,025
|
)
|
||
Restructuring disposal
|
(108 |
) |
||
Foreign exchange translation
|
62
|
|
||
Deconsolidation of Trichome (see Note 24)
|
(444
|
)
|
||
Balance at of December 31, 2022
|
$
|
-
|
NOTE 8:- |
BIOLOGICAL ASSETS (Cont.)
|
1. |
Selling price per gram - calculated as the weighted average historical selling price for all strains of cannabis sold by the Group, which is expected to approximate future selling prices.
|
2. |
Post-harvest costs - calculated as the cost per gram of harvested cannabis to complete the sale of cannabis plants post-harvest, consisting of the cost of direct and indirect materials, depreciation and labor as well as labelling and
packaging costs.
|
3. |
Attrition rate - represents the weighted average percentage of biological assets which are expected to fail to mature into cannabis plants that can be harvested.
|
4. |
Average yield per plant - represents the expected number of grams of finished cannabis inventory which are expected to be obtained from each harvested cannabis plant.
|
5. |
Stage of growth - represents the weighted average number of weeks out of the average weeks growing cycle that biological assets have reached as of the measurement date. The growing cycle is
approximately 12 weeks.
|
December 31,
|
10% change as at
December 31,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Average selling price per gram of dried cannabis (in CAD)
|
$
|
3.21
|
$
|
3.64
|
$
|
60
|
$
|
296
|
||||||||
Average post-harvest costs per gram of dried cannabis (in CAD)
|
$
|
0.75
|
$
|
1.16
|
$
|
17
|
$
|
140
|
||||||||
Attrition rate
|
51
|
%
|
27
|
%
|
44
|
%
|
100
|
%
|
||||||||
Average yield per plant (in grams)
|
38
|
47
|
42
|
228
|
||||||||||||
Average stage of growth
|
82
|
%
|
47
|
%
|
39
|
%
|
212
|
%
|
NOTE 9:- |
INVENTORY
|
December 31, 2022
|
||||||||||||
Capitalized costs
|
Fair valuation adjustment, net
|
Carrying value
|
||||||||||
Work in progress:
|
||||||||||||
Bulk cannabis
|
$
|
5,364
|
$
|
1,265
|
$
|
6,629
|
||||||
Finished goods:
|
||||||||||||
Packaged dried cannabis
|
8,665
|
$
|
549
|
9,214
|
||||||||
Other products
|
742
|
-
|
742
|
|||||||||
Balance as of December 31, 2022
|
$
|
14,771
|
$
|
1,814
|
$
|
16,585
|
December 31, 2021
|
||||||||||||
Capitalized costs
|
Fair valuation adjustment, net
|
Carrying value
|
||||||||||
Work in progress:
|
||||||||||||
Bulk cannabis
|
$
|
14,113
|
$
|
3,336
|
$
|
17,449
|
||||||
Other cannabis products
|
1,074
|
-
|
1,074
|
|||||||||
Finished goods:
|
||||||||||||
Packaged dried cannabis
|
8,974
|
270
|
9,244
|
|||||||||
Other cannabis products
|
744
|
-
|
744
|
|||||||||
Other products
|
880
|
-
|
880
|
|||||||||
Balance as of December 31, 2021
|
$
|
25,785
|
$
|
3,606
|
$
|
29,391
|
NOTE 10:- |
PROPERTY, PLANT AND EQUIPMENT, NET
|
Buildings and improvements
|
Production equipment and furniture
|
Greenhouse structure
|
Computer, software and equipment
|
Motor vehicles
|
Total
|
|||||||||||||||||||
Cost:
|
||||||||||||||||||||||||
Balance at January 1, 2021
|
$
|
2,477
|
$
|
2,761
|
$
|
1,595
|
$
|
279
|
$
|
65
|
$
|
7,177
|
||||||||||||
Additions during the year
|
1,932
|
1,846
|
508
|
261
|
31
|
4,578
|
||||||||||||||||||
Additions related to acquisitions
|
18,828
|
3,584
|
-
|
455
|
263
|
23,130
|
||||||||||||||||||
Foreign currency translation
|
(81
|
)
|
79
|
79
|
44
|
11
|
132
|
|||||||||||||||||
Balance at December 31, 2021
|
23,156
|
8,270
|
2,182
|
1,039
|
370
|
35,017
|
||||||||||||||||||
Additions during the year
|
267
|
795
|
49
|
240
|
211
|
1,562
|
||||||||||||||||||
Deconsolidation of Trichome
|
(13,770
|
)
|
(4,186
|
)
|
-
|
(302
|
)
|
(52
|
)
|
(18,310
|
)
|
|||||||||||||
Foreign currency translation
|
(104
|
)
|
(173
|
)
|
(120
|
)
|
(46
|
)
|
(79
|
)
|
(522
|
)
|
||||||||||||
Balance at December 31, 2022
|
9,549
|
4,706
|
2,111
|
931
|
450
|
17,747
|
||||||||||||||||||
Accumulated depreciation:
|
||||||||||||||||||||||||
Balance at January 1, 2021
|
184
|
919
|
444
|
81
|
17
|
1,645
|
||||||||||||||||||
Depreciation during the year
|
1,554
|
993
|
206
|
241
|
27
|
3,021
|
||||||||||||||||||
Foreign currency translation
|
4
|
40
|
26
|
11
|
2
|
83
|
||||||||||||||||||
Balance at December 31, 2021
|
1,742
|
1,952
|
676
|
333
|
46
|
4,749
|
||||||||||||||||||
Depreciation during the year
|
1,549
|
988
|
139
|
286
|
82
|
3,044
|
||||||||||||||||||
Impairment
|
5,258
|
1,931
|
1,377
|
52
|
37
|
8,655
|
||||||||||||||||||
Deconsolidation of Trichome
|
(2,428
|
)
|
(1,095
|
)
|
-
|
(121
|
)
|
(21
|
)
|
(3,665
|
)
|
|||||||||||||
Foreign currency translation
|
(28
|
)
|
(119
|
)
|
(81
|
)
|
(17
|
)
|
(12
|
)
|
(257
|
)
|
||||||||||||
Balance at December 31, 2022
|
6,093
|
3,657
|
2,111
|
533
|
132
|
12,526
|
||||||||||||||||||
Depreciated cost at December 31, 2022
|
$
|
3,456
|
$
|
1,049
|
$
|
-
|
$
|
398
|
$
|
318
|
$
|
5,221
|
||||||||||||
Depreciated cost at December 31, 2021
|
$
|
21,414
|
$
|
6,318
|
$
|
1,506
|
$
|
706
|
$
|
324
|
$
|
30,268
|
NOTE 11:- |
GOODWILL AND INTANGIBLE ASSETS, NET
|
Cultivations and processing license *)
|
Customer relationships
|
Brand
|
Goodwill
|
Other
|
Total
|
|||||||||||||||||||
Cost:
|
||||||||||||||||||||||||
Balance at January 1, 2021
|
$
|
1,060
|
$
|
58
|
$
|
63
|
$
|
304
|
$
|
68
|
$
|
1,553
|
||||||||||||
Initial consolidation
|
8,950
|
10,337
|
11,300
|
119,892
|
128
|
150,607
|
||||||||||||||||||
Foreign currency translation adjustments
|
(49
|
)
|
279
|
-
|
1,382
|
6
|
1,618
|
|||||||||||||||||
Balance at December 31, 2021
|
9,961
|
10,674
|
11,363
|
121,578
|
202
|
153,778
|
||||||||||||||||||
PPA adjustments during measurement period
|
-
|
5,715
|
-
|
(2,774
|
)
|
-
|
2,941
|
|||||||||||||||||
Disposals
|
(1,581
|
)
|
-
|
-
|
-
|
-
|
(1,581
|
)
|
||||||||||||||||
Deconsolidation of Trichome
|
(5,856
|
)
|
(2,932
|
)
|
(9,799
|
)
|
-
|
(131
|
)
|
(18,718
|
)
|
|||||||||||||
Foreign currency translation adjustments
|
-
|
(381
|
)
|
-
|
(904
|
)
|
(48
|
)
|
(1,333
|
)
|
||||||||||||||
Balance at December 31, 2022
|
2,524
|
13,076
|
1,564
|
117,900
|
23
|
135,087
|
||||||||||||||||||
Accumulated amortization:
|
||||||||||||||||||||||||
Balance at January 1, 2021
|
156
|
-
|
-
|
-
|
1
|
157
|
||||||||||||||||||
Amortization recognized in the year
|
618
|
469
|
8
|
-
|
63
|
1,158
|
||||||||||||||||||
Impairment
|
-
|
-
|
-
|
275
|
-
|
(275
|
)
|
|||||||||||||||||
Balance at December 31, 2021
|
774
|
469
|
8
|
275
|
64
|
590 | ||||||||||||||||||
Amortization recognized in the year
|
767
|
1,503
|
7
|
-
|
66
|
2,343
|
||||||||||||||||||
Impairment
|
1,215
|
4,461
|
1,501
|
107,854
|
4
|
115,035
|
|
|||||||||||||||||
Deconsolidation of Trichome
|
(1,083
|
)
|
(365
|
)
|
-
|
-
|
(114
|
)
|
(1,562
|
)
|
||||||||||||||
Balance at December 31, 2022
|
1,673
|
6,068
|
1,516
|
108,129
|
20
|
117,406
|
||||||||||||||||||
Amortized cost at December 31, 2022
|
851
|
7,008
|
48
|
9,771
|
3
|
17,681
|
||||||||||||||||||
Amortized cost at December 31, 2021
|
$
|
9,187
|
$
|
10,205
|
$
|
11,355
|
$
|
121,303
|
$
|
138
|
$
|
152,188
|
*) |
The licenses consist of GMP and GDP licenses.
|
NOTE 11:- |
INTANGIBLE ASSETS, NET (Cont.)
|
NOTE 12:- |
RIGHT-OF-USE ASSETS
|
Land and buildings
|
Motor vehicles
|
Total
|
||||||||||
Cost:
|
||||||||||||
Balance at January 1, 2021
|
$
|
1,005
|
$
|
241
|
$
|
1,246
|
||||||
Additions during the year:
|
||||||||||||
New leases
|
1,408
|
270
|
1,678
|
|||||||||
Additions related to business combinations
|
16,956
|
23
|
16,979
|
|||||||||
Currency translation adjustments
|
145
|
12
|
157
|
|||||||||
Balance at December 31, 2021
|
19,514
|
546
|
20,060
|
|||||||||
Additions during the year:
|
||||||||||||
New leases
|
302
|
311
|
613
|
|||||||||
Disposals during the year
|
(315
|
)
|
-
|
(315
|
)
|
|||||||
Termination of leases
|
(1,804
|
)
|
(207
|
)
|
(2,011
|
)
|
||||||
Deconsolidation of Trichome
|
(13,130
|
)
|
(43
|
)
|
(13,173
|
)
|
||||||
Currency translation adjustments
|
(225
|
)
|
(32
|
)
|
(257
|
)
|
||||||
Balance at December 31, 2022
|
4,342
|
575
|
4,917
|
|||||||||
Accumulated depreciation:
|
||||||||||||
Balance at January 1, 2021
|
194
|
117
|
311
|
|||||||||
Additions during the year:
|
||||||||||||
Depreciation and amortization
|
1,438
|
112
|
1,550
|
|||||||||
Currency translation adjustments
|
27
|
10
|
37
|
|||||||||
Balance at December 31, 2021
|
1,659
|
239
|
1,898
|
|||||||||
Additions during the year:
|
||||||||||||
Depreciation and amortization
|
1,768
|
176
|
1,944
|
|||||||||
Termination of leases
|
(453
|
)
|
(91
|
)
|
(544
|
)
|
||||||
Impairment
|
1,907
|
6
|
1,913
|
|||||||||
Deconsolidation of Trichome
|
(2,164
|
)
|
(10
|
)
|
(2,174
|
)
|
||||||
Currency translation adjustments
|
(35
|
)
|
(14
|
)
|
(49
|
)
|
||||||
Balance at December 31, 2022
|
$
|
2,682
|
$
|
306
|
$
|
2,988
|
||||||
Depreciated cost at December 31, 2022
|
$
|
1,660
|
$
|
269
|
$
|
1,929
|
||||||
Depreciated cost at December 31, 2021
|
$
|
17,855
|
$
|
307
|
$
|
18,162
|
NOTE 13:- |
EMPLOYEE BENEFIT ASSETS AND LIABILITIES
|
a.
|
Defined benefit plans:
|
b. |
Expenses recognized in the consolidated statements of profit or loss and other comprehensive income:
|
Year ended
December 31,
|
||||||||
2022
|
2021
|
|||||||
Current service cost
|
$
|
75
|
$
|
146
|
||||
Interest expenses
|
18
|
14
|
||||||
Total employee benefit expenses
|
$
|
93
|
$
|
160
|
||||
Interest income on plan assets
|
$
|
7
|
$
|
7
|
c. |
The defined benefit liability, net:
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
Defined benefit obligation
|
$
|
418
|
$
|
668
|
||||
Fair value of plan assets
|
(172
|
)
|
(277
|
)
|
||||
Net defined benefit liability
|
$
|
246
|
$
|
391
|
NOTE 13:- |
EMPLOYEE BENEFIT ASSETS AND LIABILITIES (Cont.)
|
d. |
Changes in the present value of defined benefit liabilities:
|
2022
|
2021
|
|||||||
Balance at January 1,
|
$
|
668
|
$
|
588
|
||||
Current service cost
|
75
|
146
|
||||||
Interest expenses
|
18
|
14
|
||||||
Benefits paid
|
(268
|
)
|
(50
|
)
|
||||
Re-measurement loss on defined benefit plans
|
(27
|
)
|
(33
|
)
|
||||
Foreign currency translation effect
|
(48
|
)
|
3
|
|||||
Balance at December 31,
|
$
|
418
|
$
|
668
|
e. |
Changes in the fair value of plan assets:
|
2022
|
2021
|
|||||||
Balance at January 1,
|
$
|
277
|
$
|
217
|
||||
Interest income
|
7
|
7
|
||||||
Return, net of interest income - remeasurement gain (loss)
|
32
|
(12
|
)
|
|||||
Benefits paid
|
(187
|
)
|
(50
|
)
|
||||
Amounts deposited
|
43
|
116
|
||||||
Foreign currency translation effect
|
-
|
(1
|
)
|
|||||
Balance at December 31,
|
$
|
172
|
$
|
277
|
f. |
The principal assumptions underlying the defined benefit plan:
|
2022
|
2021
|
|||||||
%
|
||||||||
Discount rate
|
5.69
|
3.5
|
||||||
Salary growth
|
4.93
|
4.64
|
NOTE 14:- |
OTHER PAYABLES
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
Accrued expenses
|
$
|
1,848
|
$
|
6,146
|
||||
Employees and payroll accruals
|
1,066
|
8,267
|
||||||
Government authorities
|
1,617
|
4,002
|
||||||
Related parties
|
693
|
875
|
||||||
Advances from customers
|
31
|
137
|
||||||
Other payables - restructuring
|
116
|
-
|
||||||
Other payables
|
642
|
716
|
||||||
$
|
6,013
|
$
|
20,143
|
NOTE 15:-
|
FINANCIAL INSTRUMENTS
|
December 31,
|
|||||||||||
Note
|
2022
|
2021
|
|||||||||
Financial assets:
|
|||||||||||
Investments
|
c,e
|
|
$
|
2,410
|
$
|
2,429
|
|||||
Derivative assets
|
$
|
-
|
$
|
14
|
|||||||
Financial liabilities:
|
|||||||||||
Warrants
|
b,d
|
|
$
|
(8
|
)
|
$
|
(6,022
|
)
|
a. |
Management believes that the carrying amount of cash and cash equivalents, trade receivables, other accounts receivable, loans receivables, trade payables, bank loans, other account payables and accrued
expenses and purchase consideration payable, and approximate their fair value due to the short-term maturities of these instruments.
|
b. |
For the years ended December 31, 2022 and 2021, the Company recognized a revaluation gain (loss) from remeasurement of Warrants of $nil and $15,929, respectively, in the consolidated statement of profit or loss and other comprehensive
income, which unrealized gain is included in finance income (expense). During 2021, amount of $611 of the Warrants was transferred to equity and the rest expired.
|
NOTE 15:- |
FINANCIAL INSTRUMENTS (Cont.)
|
c. |
On December 26, 2019, IMC entered into a share purchase agreement (the “SPA”) with Xinteza API Ltd. ("Xinteza"), a company with a unique biosynthesis technology.
|
d. |
On May 10, 2021, the Company completed an overnight marketed offering (the “Offering”) of 608,696 Common Shares (each an “Offered Share”) at a price of US$57.5 per Offered Share for aggregate gross proceeds of approximately US$35 million
($42,502). The Company also issued 304,348 Common Share purchase warrants (each an “2021 Warrant”) to the purchasers of Offered Shares, for no additional consideration, that entitle the holders to purchase 304,348 Common Shares of the
Company at an exercise price of US$7.2 per Common Share for a term of 5 years from the closing date.
|
NOTE 15:- |
FINANCIAL INSTRUMENTS (Cont.)
|
December 31,
|
December 31,
|
|||||
2022
|
2021
|
Sensitivity
|
||||
Expected volatility
|
93 %
|
83 %
|
Increase (decrease) in key assumptions would result in increase (decrease) in fair value
|
|||
Expected life (in years)
|
3.342
|
4.342
|
||||
Risk-free interest rate
|
0.85%
|
0.85%
|
Increase (decrease) in key assumptions would result in decrease (increase) in fair value
|
|||
Expected dividend yield
|
0%
|
0%
|
||||
Fair value:
|
||||||
Per Warrant (Canadian Dollar)
|
$0.003
|
$1.979
|
||||
Total Warrants (Canadian Dollar in thousands)
|
$8
|
$6,022
|
e. |
Financial risk management:
|
NOTE 15:- |
FINANCIAL INSTRUMENTS (Cont.)
|
Less than one year
|
1 to 5 years
|
6 to 10
Years
|
>10
years
|
|||||||||||||
Lease liabilities
|
$
|
922
|
$
|
1,830
|
$
|
598
|
$
|
-
|
||||||||
Bank loans and others
|
$
|
9,246
|
$
|
399
|
$
|
-
|
$
|
-
|
||||||||
Total
|
$
|
10,168
|
$
|
2,229
|
$
|
598
|
$
|
-
|
NOTE 15:- |
FINANCIAL INSTRUMENTS (Cont.)
|
Less than one year
|
1 to 5 years
|
6 to 10
Years
|
>10
years
|
|||||||||||||
Lease liabilities
|
$
|
3,130
|
$
|
11,781
|
$
|
12,760
|
$
|
2,620
|
||||||||
Bank loans
|
9,502
|
-
|
-
|
-
|
||||||||||||
Total
|
$
|
12,632
|
$
|
11,781
|
$
|
12,760
|
$
|
2,620
|
NOTE 15:- |
FINANCIAL INSTRUMENTS (Cont.)
|
f. |
Changes in liabilities arising from financing activities:
|
Loans
|
Lease liabilities
|
Warrants
|
Total liabilities arising from financing activities
|
|||||||||||||
Balance as of January 1, 2021
|
$
|
-
|
$
|
990
|
$
|
16,540
|
$
|
17,530
|
||||||||
Issuance of new warrants
|
-
|
-
|
11,832
|
11,832
|
||||||||||||
Additions for new loans
|
8,504
|
-
|
-
|
8,504
|
||||||||||||
Additions for new leases
|
-
|
1,678
|
-
|
1,678
|
||||||||||||
Additions related to acquisitions
|
1,957
|
17,222
|
-
|
19,179
|
||||||||||||
Repayments
|
(700
|
)
|
(1,980
|
)
|
-
|
(2,680
|
)
|
|||||||||
Effective interest
|
-
|
1,347
|
-
|
1,347
|
||||||||||||
Other changes
|
133
|
117
|
(611
|
)
|
(361
|
)
|
||||||||||
Effect of changes in fair value
|
-
|
-
|
(21,739
|
)
|
(21,739
|
)
|
||||||||||
Balance as of December 31, 2021
|
9,894
|
19,374
|
6,022
|
35,290
|
||||||||||||
Additions for new loans
|
4,660
|
-
|
-
|
4,660
|
||||||||||||
Additions for new leases
|
-
|
613
|
-
|
613
|
||||||||||||
Repayments
|
-
|
(3,085
|
)
|
-
|
(3,085
|
)
|
||||||||||
Effective interest
|
-
|
1,429
|
-
|
1,429
|
||||||||||||
Effect of exchange rate differences
|
(1,135
|
)
|
(2,056
|
)
|
-
|
(3,191
|
)
|
|||||||||
Deconsolidation of Trichome
|
(3,774
|
)
|
(14,386
|
)
|
-
|
(18,160
|
)
|
|||||||||
Effect of changes in fair value
|
-
|
-
|
(6,014
|
)
|
(6,014
|
)
|
||||||||||
Balance as of December 31, 2022
|
$
|
9,645
|
$
|
1,889
|
$
|
8
|
$
|
11,542
|
NOTE 16:- |
CONTINGENT LIABILITIES, GUARANTEES, COMMITMENTS AND CHARGES
|
a. |
On August 19, 2019, a cannabis consumer (the “Applicant”) filed a motion for approval of a class action to Tel Aviv - Jaffa District Court (the “Motion”) against 17 companies (the “Parties”) operating in the field of medical cannabis in
Israel, including Focus. The Applicant’s argument is that the Parties did not accurately mark the concentration of active ingredients in their products. The personal suit sum for each class member stands at NIS 15,585 and the total amount
of the class action suit is estimated at NIS 685,740,000. On June 2, 2020, the Parties submitted their response to the Motion. The Parties argue in their response that the threshold conditions for approval of a class action were not met,
since there is no reasonable possibility that the causes of action in the Motion will be decided in favor of the class group. On July 3, 2020 the Applicant submitted his response to the Parties’ response. On July 5, 2020 the Applicant was
absent from the hearing. As a result, on July 23, 2020 the Parties filed an application for a ruling of expenses which received a response from the Applicant on August 12, 2020, asking to decline this request. On September 29, 2020 the
court ruled that the Applicant would pay the Parties’ expenses amount of NIS 750. On July 14, 2021 a prehearing was held. The court recommended the parties negotiate independently to avoid litigation, and if negotiations fail, then to begin
mediation proceedings. The parties agreed to follow the court’s recommendations. On November 3, 2021 the court ruled the Parties will file an update regarding the mediation procedure in 30 days. The parties conducted unsuccessful
negotiations. On March 14, 2022, the Applicant filed a request to amend the Motion (the “Applicant’s Request for Amendment”) and the judge disqualified herself from hearing the case. As a result, the case was redirected. On June 21, 2022
the Parties filed a response to the Applicant’s Request for Amendment. On September 12, 2022, the court ruled on the Applicant’s Request for Amendment and accepted the Applicant’s request to clarify its claims regarding product labeling,
while rejecting the Applicant’s other requests. On November 27, 2023, the Applicant submitted an amended application for approval of the motion (the “Amended Motion"), and the Parties’ response was submitted on February 8, 2023. The date of
the preliminary hearing was postpone several timed and is yet to be determined by court.
Due to the current preliminary state of the litigation process and based on the opinion of legal counsel to Focus, the Company’s management believes that it is not reasonably possible to assess the outcome of
the proceeding. Therefore, no provision has been recorded in respect thereof.
|
b. |
On July 11, 2021 the Company was informed that on June 30, 2021, a claim was filed to Beer Sheva Magistrate Court, by the municipal committee presiding over planning and construction in southern Israel against Focus, Focus’ directors and
officers, including Oren Shuster and Rafael Gabay, and certain landowners, claiming for inadequate permitting for construction relating to the Focus Facility (the “Construction Proceedings”).
On December 6, 2021 the defendants filed a motion request for dismissal the indictment on the ground of defense of justice. The municipal committee filed its response and after that the defendants filed a
response to the municipal committee’s response. As of the date of this letter no decision has yet been made on the application.
|
NOTE 16:- |
CONTINGENT LIABILITIES, GUARANTEES, COMMITMENTS AND CHARGES (Cont.)
|
A hearing was initially set to December 1, 2021 but postponed several times in order to allow the parties to negotiate towards a resolution. The hearing is set June 22, 2023. A draft agreement between the
parties sent by the defendant to the municipal committee in order for it to be sent to the state attorney’s office for their comments, which once obtained, will be filed with the Court for its approval. The Court is not obligated to approve
the agreement between the parties, if obtained.
At this preliminary stage, based on the opinion of its legal counsel, Focus’ management cannot assess the chances of the claim advancing or the potential outcome of the Construction Proceedings.
|
c. |
On November 19, 2021, Adjupharm filed a statement of claim (the “Claim”) to the District Court of Stuttgart (the “Stuttgart Court”)
against Stroakmont & Atton Trading GmbH (“Stroakmont & Atton”), its shareholders and managing directors regarding a debt owed by Stroakmont & Atton to Adjupharm in an amount of
approximately EUR 947,563 for COVID-19 test kits purchased by Stroakmont & Atton from Adjupharm in May 2021. The Claim was accepted on December 2, 2021. In January 2022, Stroakmont & Atton filed its statement of defence to the
Stuttgart Court in which they essentially stated two main arguments for their defense:
|
1. |
that the contractual partner of the Company is not the defendant, Stroakmont & Atton is not the real purchaser rather a company named Uniclaro GmbH.
|
2. |
that the Company allegedly placed an order with Uniclaro GmbH for a total of 4.3 million Clongene COVID-19 tests, of which Uniclaro GmbH claims to have a payment claim against the Company for a partial delivery of 380,400 Clongene
COVID-19 tests in the total amount of EUR 941,897.20. Uniclaro GmbH has assigned this alleged claim against the Company to Stroakmont & Atton Trading GmbH, and Stroakmont & Atton Trading GmbH has precautionary declared a set-off
against the Company’s claim.
|
On March 22, 2022 Adjupharm filed a response to Stroakmont & Atton’s statement of defence and rejected both allegations with a variety of legal arguments and facts and also offered evidence to the contrary
in the form of testimony from the witnesses in question.
The burden of proof for both allegations lies with the opponents and they offered evidences to the court in the form of testimony from certain witnesses. If the opponents succeed in proving both allegations to
the court, the chances of winning the lawsuit will be considerably reduced. However, it will not be easy for the opponents to present evidence of these allegations.
On May 27, 2022, the conciliation hearing and main hearing were held. The Stuttgart Court ruled that the Company shall submit another writ by August 29, 2022. The Stuttgart Court also scheduled a pronouncement
date for September 7, 2022, when the Stuttgart Court will enter a judgement or hold an evidentiary hearing with witnesses. Following the pronouncement date on September 7, 2022 an evidentiary hearing with witnesses was held on two
occasions, January 11, 2023, where witnesses on behalf of Adjupharm testified, and on February 22, 2023, witnesses on behalf of Stroakmont & Atton testified.
The court provided the parties a deadline until March 24 2023 to evaluate the testimonies of the witnesses and to deliver to the court a summary of the factual and legal situation after the court hearings. The
court will announce its decision for further proceedings or its judgment on April 5, 2023. At this stage, the Company management cannot assess the chances of the claim advancing or the potential outcome of this these proceedings.
|
NOTE 17:- |
TAXES ON INCOME
|
a. |
Tax rates applicable to the Group:
|
1. |
The Company is subject to tax rates applicable in Canada. The combined federal and provincial rate for 2022 and 2021 is 26.5%.
|
2. |
The Israeli subsidiaries are subject to Israeli corporate income tax rate of 23% in 2022 and 2021.
|
3. |
The German subsidiary is subject to weighted tax rate of approximately 29.1% (composed of Federal and Municipal tax).
|
b.
|
Carryforward losses for tax purposes:
|
c.
|
Income tax expense (benefit):
|
Year ended
December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Current
|
$
|
688
|
$
|
243
|
$
|
25
|
||||||
Deferred, net
|
(1,810
|
)
|
278
|
(66
|
)
|
|||||||
Income tax from previous years
|
(16
|
)
|
(21
|
)
|
303
|
|||||||
$
|
(1,138
|
)
|
$
|
500
|
$
|
262
|
NOTE 17:- |
TAXES ON INCOME (Cont.)
|
d.
|
Deferred taxes:
|
Statements of
financial position
|
||||||||
December 31,
|
||||||||
2022
|
2021
|
|||||||
Deferred tax assets:
|
||||||||
Carryforward tax losses and other
|
$
|
731
|
$
|
2
|
||||
Other deferred tax assets
|
32
|
14
|
||||||
763
|
16
|
|||||||
Deferred tax liabilities:
|
||||||||
Inventory and biological assets
|
-
|
863
|
||||||
Intangible assets
|
1,285
|
5,721
|
||||||
Other
|
47
|
7
|
||||||
1,332
|
6,591
|
|||||||
Deferred tax liabilities, net
|
$
|
(569
|
)
|
$
|
(6,575
|
)
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
Non-current assets
|
$
|
763
|
$
|
16
|
||||
Non-current liabilities
|
$
|
1,332
|
$
|
6,591
|
NOTE 17:- |
TAXES ON INCOME (Cont.)
|
e. |
Reconciliation of tax expense (benefit) and the accounting loss multiplied by the Company's domestic tax rate for:
|
Year ended
December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Loss before income tax
|
$
|
(26,060
|
)
|
$
|
(164
|
)
|
$
|
(28,472
|
)
|
|||
Statutory tax rate in Canada 26.5%
|
(6,906
|
)
|
(43
|
)
|
(7,545
|
)
|
||||||
Increase (decrease) in income tax due to:
|
||||||||||||
Non-deductible expenses (non-taxable income), net for tax purposes
|
1,764
|
(4,208
|
)
|
6,306
|
||||||||
Effect of different tax rate of subsidiaries
|
599
|
310
|
161
|
|||||||||
Adjustments in respect of current income tax of previous years
|
(16
|
)
|
(21
|
)
|
303
|
|||||||
Recognition (derecognition) of tax benefit in respect of losses of previous years
|
-
|
846
|
(830
|
)
|
||||||||
Unrecognized tax benefit in respect of loss for the year
|
4,037
|
4,093
|
1,771
|
|||||||||
Other adjustments
|
(616
|
)
|
(477
|
)
|
96
|
|||||||
Income tax expense (benefit)
|
$
|
(1,138
|
)
|
$
|
500
|
$
|
262
|
NOTE 18:- |
EQUITY
|
a. |
Composition of share capital:
|
December 31, 2022
|
December 31, 2021
|
|||||||||||||
Authorized
|
Issued and outstanding
|
Authorized
|
Issued and outstanding
|
|||||||||||
Number of shares
|
||||||||||||||
Common Shares without par value
|
Unlimited |
7,569,526
|
Unlimited |
6,811,620
|
b. |
Capital issuances:
|
NOTE 18:- |
EQUITY (Cont.)
|
c. |
Changes in issued and outstanding share capital:
|
Number of shares
|
||||
Balance as of January 1, 2021
|
3,976,576
|
|||
Common Shares issued as a result of Warrants and Compensation options exercised
|
63,378
|
|||
Common Shares issued as a result of options exercises
|
51,735
|
|||
Purchase of treasury common shares
|
(10,165
|
)
|
||
Common Shares issued related secondary transaction and business combinations
|
2,730,096
|
|||
Balance as of December 31, 2021
|
6,811,620
|
|||
Common Shares issued as a result of options exercises
|
21,736
|
|||
Common shares issued in settlement of purchase consideration of business combination
|
126,006
|
|||
Issuance of treasury common shares
|
10,165
|
|||
Issuance of Common Shares
|
599,999
|
|||
Balance as of December 31, 2022
|
7,569,526
|
NOTE 18:- |
EQUITY (Cont.)
|
d. |
Share option plan:
|
Year ended
December 31,
|
||||
2022
|
2021
|
|||
Exercise price (in CAD)
|
$2.3-$27.3
|
$45-$101.2
|
||
Dividend yield (%)
|
-
|
-
|
||
Expected life of share options (Years)
|
4-5
|
3-4
|
||
Volatility (%)
|
77.04-107.03
|
80.61-83.68
|
||
Annual risk-free rate (%)
|
1.43-3.85
|
0.52-0.77
|
||
Share price (in CAD)
|
$2.3-$27.3
|
$45-$345.5
|
NOTE 18:- |
EQUITY (Cont.)
|
Year ended December 31, 2022
|
||||||||
Number of options
|
Weighted average exercise price
|
|||||||
in CAD
|
||||||||
Options outstanding at the beginning of the year
|
544,325
|
39.1
|
||||||
Options granted during the year
|
32,503
|
10.85
|
||||||
Options exercised during the year
|
(22,705
|
)
|
16
|
|||||
Options forfeited during the year
|
(34,953
|
)
|
49.9
|
|||||
Options outstanding at the end of year
|
519,170
|
$
|
37.6
|
|||||
Options exercisable at the end of year
|
360,769
|
$
|
36.95
|
Year ended December 31, 2021
|
||||||||
Number of options
|
Weighted average exercise price
|
|||||||
in CAD
|
||||||||
Options outstanding at the beginning of the year
|
315,487
|
22
|
||||||
Options granted during the year
|
296,427
|
62
|
||||||
Options exercised during the year
|
(51,735
|
)
|
24.3
|
|||||
Options forfeited during the year
|
(15,854
|
)
|
40.8
|
|||||
Options outstanding at the end of year
|
544,325
|
$ |
39.1
|
|||||
Options exercisable at the end of year
|
188,848
|
$ |
20
|
NOTE 18:- |
EQUITY (Cont.)
|
Number of RSU
|
||||
Outstanding at the beginning of the year
|
55,000
|
|||
Granted during the year
|
-
|
|||
Outstanding at the end of the year
|
55,000
|
|||
Exercisable at the end of year
|
41,243
|
e. |
Other convertible securities:
|
NOTE 19:- |
SELECTED STATEMENTS OF PROFIT OR LOSS DATA
|
Year ended
December 31,
|
||||||||
2022
|
2021
|
|||||||
Salaries and related expenses
|
$
|
11,184
|
$
|
8,493
|
||||
Depreciation and amortization
|
$
|
2,815
|
$
|
2,125
|
NOTE 20:- |
NET LOSS PER SHARE
|
Year ended December 31,
|
||||||||||||||||
2022
|
2021
|
|||||||||||||||
Weighted number of shares (in thousands)
|
Net loss attributable to equity holders of the Company
|
Weighted number of shares (in thousands)
|
Net loss attributable to equity holders of the Company
|
|||||||||||||
For the computation of basic net earnings from continuing operations
|
7,181
|
$
|
(22,511
|
)
|
5,796
|
$
|
(17,763
|
)
|
||||||||
Effect of potential dilutive Ordinary shares - Warrants
|
304
|
(6,014
|
)
|
181
|
(21,739
|
)
|
||||||||||
For the computation of diluted net earnings from continuing operations (*)
|
7,485
|
$
|
(28,525
|
)
|
5,977
|
$
|
(39,502
|
)
|
||||||||
For the computation of basic and diluted net earnings from discontinued operations (*)
|
7,181
|
$
|
(166,379
|
)
|
5,796
|
$
|
(17,853
|
)
|
*) |
For 2022 and 2021, potentially dilutive securities (share options) were excluded from the calculation of diluted earnings per share as they are antidilutive.
|
**) |
Including the effect of Share Consolidation (See Note 18a).
|
NOTE 21:- |
RELATED PARTY BALANCES AND TRANSACTIONS
|
a. |
Balances and transactions:
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
Other accounts receivables
|
$
|
83
|
$
|
11
|
||||
Other accounts payables
|
$
|
693
|
$
|
875
|
NOTE 21:- |
RELATED PARTY BALANCES AND TRANSACTIONS (Cont.)
|
Year ended
December 31,
|
||||||||
2022
|
2021
|
|||||||
General and administrative expenses
|
$
|
1,064
|
$
|
1,116
|
a. |
Compensation of key management personnel of the Group:
|
Year ended
December 31,
|
||||||||
2022
|
2021
|
|||||||
Payroll and related expenses
|
$
|
916
|
$
|
1,379
|
||||
Share-based compensation
|
$
|
437
|
$
|
4,349
|
||||
Professional fees *)
|
$
|
1,040
|
$
|
1,029
|
*) |
Includes payments to shareholders for the years ended 2022 and 2021 of $503 and $455, respectively.
|
NOTE 22:- |
SUMMARIZED FINANCIAL INFORMATION FOR PARTLY OWNED SUBSIDIARY
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
Statement of financial position at reporting date (as presented in Focus' financial statements):
|
||||||||
Current assets
|
$
|
21,521
|
$
|
22,913
|
||||
Non-current assets
|
1,107
|
4,473
|
||||||
Current liabilities
|
(24,859
|
)
|
(19,616
|
)
|
||||
Non-current liabilities
|
(52
|
)
|
(1,883
|
)
|
||||
Total equity (deficiency)
|
$
|
(2,283
|
)
|
$
|
5,887
|
Year ended
December 31,
|
||||||||
2022
|
2021
|
|||||||
Operating results (as presented in Focus' financial statements):
|
||||||||
Revenues
|
$
|
19,565
|
$
|
14,747
|
||||
Net loss
|
(7,746
|
)
|
(1,524
|
)
|
||||
Other comprehensive income
|
96
|
37
|
||||||
Total comprehensive loss
|
$
|
(7,650
|
)
|
$
|
(1,487
|
)
|
Year ended
December 31,
|
||||||||
2022
|
2021
|
|||||||
Cash flows (as presented in Focus' financial statements):
|
||||||||
From operating activities
|
$
|
(9,635
|
)
|
$
|
2,346
|
|||
From investing activities
|
2,825
|
(783
|
)
|
|||||
From financing activities
|
3,947
|
560
|
||||||
Effect of foreign exchange on cash and cash equivalents
|
(110
|
)
|
169
|
|||||
Net increase (decrease) in cash and cash equivalents
|
$
|
(2,973
|
)
|
$
|
2,292
|
NOTE 23:- |
OPERATING SEGMENTS
|
Israel
|
Germany
|
Adjustments
|
Total
|
|||||||||||||
Year ended December 31, 2022
|
||||||||||||||||
Revenue
|
$
|
50,500
|
$
|
3,835
|
$
|
-
|
$
|
54,335
|
||||||||
Segment loss
|
$
|
(23,606
|
)
|
$
|
(3,225
|
)
|
$
|
-
|
$
|
(26,831
|
)
|
|||||
Unallocated corporate expenses
|
$
|
(3,960
|
)
|
$
|
(3,960
|
)
|
||||||||||
Total operating loss
|
$
|
(30,791
|
)
|
|||||||||||||
Depreciation, amortization and impairment
|
$
|
6,747
|
$
|
200
|
$
|
-
|
$
|
6,947
|
Israel
|
Germany
|
Adjustments
|
Total
|
|||||||||||||
Year ended December 31, 2021
|
||||||||||||||||
Revenue
|
$
|
25,431
|
$
|
8,622
|
$
|
-
|
$
|
34,053
|
||||||||
Segment loss
|
$
|
(10,653
|
)
|
$
|
(5,142
|
)
|
$
|
-
|
$
|
(15,795
|
)
|
|||||
Unallocated corporate expenses
|
$
|
(7,240
|
)
|
$
|
(7,240
|
)
|
||||||||||
Total operating loss
|
$
|
(23,035
|
)
|
|||||||||||||
Depreciation, amortization and impairment
|
$
|
1,424
|
$
|
701
|
$
|
-
|
$
|
2,125
|
NOTE 23:- |
OPERATING SEGMENTS (Cont.)
|
Israel
|
Germany
|
Adjustments
|
Total
|
|||||||||||||
Year ended December 31, 2020
|
||||||||||||||||
Revenue
|
$
|
13,826
|
$
|
2,064
|
$
|
-
|
$
|
15,890
|
||||||||
Segment loss
|
$
|
(2,090
|
)
|
$
|
(3,744
|
)
|
$
|
-
|
$
|
(5,834
|
)
|
|||||
Unallocated corporate expenses
|
$
|
(2,411
|
)
|
$
|
(2,411
|
)
|
||||||||||
Total operating loss
|
$
|
(8,245
|
)
|
|||||||||||||
Depreciation, amortization and impairment
|
$
|
856
|
$
|
74
|
$
|
-
|
$
|
930
|
NOTE 24:- |
DISCONTINUED OPERATIONS AND DECONSOLIDATION OF TRICHOME
|
NOTE 24:- |
DISCONTINUED OPERATIONS AND DECONSOLIDATION OF TRICHOME (Cont.)
|
November 6,
2022
|
December 31,
2021
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
406
|
$
|
3,171
|
||||
Trade receivables
|
1,047
|
8,486
|
||||||
Other accounts receivable
|
2,194
|
11,198
|
||||||
Loans receivable
|
1,010
|
2,708
|
||||||
Biological assets
|
444
|
1,435
|
||||||
Inventories
|
6,784
|
9,715
|
||||||
11,885
|
36,713
|
|||||||
Non-current assets:
|
||||||||
Property, plant and equipment, net
|
14,645
|
21,236
|
||||||
Derivative assets
|
-
|
14
|
||||||
Right-of-use assets, net
|
10,999
|
14,570
|
||||||
Intangible assets, net
|
17,157
|
22,846
|
||||||
Goodwill
|
-
|
107,854
|
||||||
42,801
|
166,520
|
|||||||
Total Assets
|
$
|
54,686
|
$
|
203,233
|
November 6,
2022
|
December 31,
2021
|
|||||||
LIABILITIES
|
||||||||
Current liabilities:
|
||||||||
Trade payables
|
$
|
7,266
|
$
|
4,667
|
||||
Bank loans and credit facilities
|
3,774
|
8,684
|
||||||
Other accounts payable and accrued expenses
|
25,217
|
14,019
|
||||||
Current maturities of operating lease liabilities
|
869
|
841
|
||||||
37,126
|
28,211
|
|||||||
Non-current liabilities:
|
||||||||
Operating lease liabilities
|
13,517
|
14,883
|
||||||
Deferred tax liability, net
|
2,872
|
4,065
|
||||||
16,389
|
18,948
|
|||||||
Total liabilities
|
$
|
53,515
|
$
|
47,159
|
NOTE 24:- |
DISCONTINUED OPERATIONS AND DECONSOLIDATION OF TRICHOME (Cont.)
|
Period ended November 6,
|
Year ended December 31
|
|||||||
2022
|
2021
|
|||||||
Revenues
|
$
|
28,171
|
$
|
20,247
|
||||
Cost of revenues
|
24,227
|
16,960
|
||||||
Gross profit before fair value adjustments
|
3,944
|
3,287
|
||||||
Fair value adjustments:
|
||||||||
Unrealized change in fair value of biological assets
|
399
|
902
|
||||||
Realized fair value adjustments on inventory sold in the period
|
(2,528
|
)
|
(226
|
)
|
||||
Total fair value adjustments
|
(2,129
|
)
|
676
|
|||||
Gross profit
|
1,815
|
3,963
|
||||||
General and administrative expenses
|
38,464
|
14,998
|
||||||
Impairment of goodwill, intangible assets, right-of-use assets and fixed assets
|
115,112
|
-
|
||||||
Selling and marketing expenses
|
4,912
|
2,270
|
||||||
Restructuring expenses
|
4,506
|
-
|
||||||
Share-based compensation
|
1,130
|
2,049
|
||||||
Total operating expenses
|
164,124
|
19,317
|
||||||
Operating loss
|
(162,309
|
)
|
(15,354
|
)
|
||||
Finance expenses, net
|
(5,264
|
)
|
(2,495
|
)
|
||||
Loss before income taxes
|
(167,573
|
)
|
(17,849
|
)
|
||||
Income tax expense (benefit)
|
(1,194
|
)
|
5
|
|||||
Net loss from discontinued operations, net of tax
|
$
|
(166,379
|
)
|
$
|
(17,854
|
)
|
Period ended November 6, 2022
|
Year ended December 31, 2021
|
|||||||
Operating activities
|
$
|
(300
|
)
|
$
|
(10,621
|
)
|
||
Investing activities
|
$
|
(615
|
)
|
$
|
(1,434
|
)
|
||
Financing activities
|
$
|
(1,850
|
)
|
$
|
14,864
|
NOTE 25:- |
SUBSEQUENT EVENTS
|
a. |
LIFE Offering
In January and February of 2023, the Company issued an aggregate of issued 2,828,248 units of the Company (each a “Unit”) at a price of US$1.25 per Unit for aggregate gross proceeds of US$3,535 in a
series of closings pursuant to a non-brokered private placement offering to purchasers resident in Canada (except the Province of Quebec) and/or other qualifying jurisdictions relying on the listed issuer financing exemption under
Part 5A of National Instrument 45-106 – Prospectus Exemptions (the “LIFE Offering”). Each Unit consisted of one Common Share and one Common Share purchase warrant (each, a “Warrant”), with
each Warrant entitling the holder thereof to purchase one additional Common Share at an exercise price of US$1.50 for a period of 36 months from the date of issue.
In addition, a non-independent director of the Company subscribed for an aggregate of 131,700 Units under the LIFE Offering at an aggregate subscription price of US$165. The director's subscription price
was satisfied by the settlement of US$165 in debt owed by the Company to the director for certain consulting services previously rendered by the director to the Company.
|
b. |
Concurrent Offering
Concurrent with the LIFE Offering, the Company issued an aggregate of 2,317,171 Units on a non-brokered private placement basis at a price of US$1.25 per Unit
for aggregate gross proceeds of US$2,896 (the “Concurrent Offering”). The Concurrent Offering was led by insiders of the Company. The Units offered under the Concurrent Offering were offered for sale to purchasers in all provinces and
territories of Canada and jurisdictions outside Canada pursuant to available prospectus exemptions other than for the LIFE Offering exemption.
All Units issued under the Concurrent Offering were subject to a statutory hold period of four months and one day in accordance with applicable Canadian
securities laws.
|