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TORONTO and GLIL YAM, Israel - IM Cannabis Corp. (CSE: IMCC) (NASDAQ: IMCC), a medical cannabis company with operations in Israel and Germany, has received a notification from the Nasdaq Stock Market LLC indicating that it no longer complies with a listing rule requiring a minimum stockholders' equity of US$2.5 million. The company reported equity of US$2,184,722 for the period ending December 31, 2024. According to InvestingPro data, the company faces significant financial challenges with a current ratio of 0.67, indicating potential liquidity concerns.
The notification, dated April 9, 2025, does not immediately affect the company's listing on the Nasdaq Capital Market, provided IM Cannabis meets other listing standards. The company has until May 26, 2025, to submit a compliance plan, which could extend its deadline to demonstrate compliance by up to 180 days from the notification date. InvestingPro analysis shows the company's stock has declined by nearly 70% over the past year, with a market capitalization of just $4.15 million.
IM Cannabis's business operations remain unaffected by this development, and the company is exploring options to regain compliance and maintain its listing. While efforts will be made to comply, there is no guarantee of achieving this goal. InvestingPro subscribers can access detailed financial health metrics and 10 additional ProTips that provide crucial insights into the company's operational challenges, including its debt burden and cash burn rate.
In addition, IM Cannabis, through its subsidiary IMC Holdings, is planning to acquire the remaining 26% interest in Focus Medical Herbs Ltd. ("Focus") from Ewave Group Ltd. The purchase price has been set at NIS 818,740 and is intended to be settled by issuing common shares of IM Cannabis. Approval for this transaction will be sought from disinterested shareholders at the annual general and special meeting scheduled for May 23, 2025.
Focus, a private company in Israel, transitioned from cultivation and production of medical cannabis to exclusively importing activities as of June 2022. The acquisition of the remaining shares in Focus is seen as a related party transaction, requiring shareholder approval and a formal valuation, although the transaction is exempt from some requirements due to its size relative to the company's market capitalization.
IM Cannabis operates in Israel and Germany, focusing on providing premium cannabis products to medical patients. The information in this article is based on a press release statement.
In other recent news, IM Cannabis Corp reported a 25% increase in its Q4 2024 revenue compared to the same period in the previous year, reaching €13.3 million. This growth was largely driven by an impressive 183% surge in sales within the German market, which contributed significantly to the company's overall revenue. Despite a net loss of €11.8 million for the year, the company achieved a positive adjusted EBITDA of €500,000 in Q4, marking a notable improvement from the previous year's Q4 loss. Operating expenses were reduced by 17% in 2024, enhancing financial efficiency. The company's strategic focus on the German market has resulted in it accounting for 40% of total revenue in the latter half of the year. Looking ahead, IM Cannabis plans to continue its growth trajectory in Germany, with expectations for a strong Q1 2025. The company does not anticipate significant growth in the Israeli market. These recent developments reflect the company's ongoing efforts to optimize operations and strengthen its market position.
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