IM Cannabis Corp.

Good morning, and welcome to I Am Cannabis' fourth quarter and full year 2024 earnings conference call. Today's conference call is being recorded. At this time, I would like to turn the conference over to Anna Taranko, Director of Investor and Public Relations. Anna?

Good morning and thank you, operator. Joining me for today's call are IAM Cannabis Chief Executive Officer Oren Schuster and Chief Financial Officer Uri Bornberg. The earnings and press release that accompanies this call is available on the investor relations section of our website at investors.iamcannabis.com. Today's call will include estimates and other forward-looking information and statements, including statements concerning future results of operations, economic conditions, and anticipated courses of action, and are based on assumptions, expectations, estimates, and projections as the date hereof. This information may involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by such statements. Factors that could cause or contribute to such differences are described in detail in the company's most recent filings available on cedarplus at www.cedarplus.ca and edgar at www.psych.gov. Furthermore, certain non-IFRS measures will be referred to during this call. The term non-IFRS adjusted EBITDA loss or non-IFRS adjusted EBITDA will hereafter be referred to as adjusted EBITDA loss or adjusted EBITDA as applicable. Any estimates or forward-looking information or statements provided are accurate only as of the date of this call and the company undertakes no obligation to publicly update any forward-looking information or statements or supply new information regarding the circumstances after the date of this call. Please also note that all references on this call reflect currency and Canadian dollars unless otherwise stated. With that, it's my pleasure to turn the call over to Oren Schuster, CEO of IM Cannabis. Oren, please go ahead.

Thank you, Anna. Good morning everyone and thank you for joining us today. As a medical cannabis company based in Germany and Israel, the April 2024 partial legalization in Germany was a game changer. Since then, the German market and our sales in Germany have experienced extraordinary growth at a tremendous velocity. But my personal 2024 highlights were the continuous improvements we made both strategically and operationally, building a solid lean basis from which to drive sustainable growth in 2025. In 2024, we started to shift our focus from the transition years in 2022 and 2023 towards delivery. At the same time, we continued fine-tuning to maintain our efficiency and agility, This is an ongoing process. It is especially important in the dynamic cannabis market to ensure that we keep our competitive edge. As a company, we have two areas of focus in 2024. One, full integration and active cost management to drive efficiencies, and two, building a strong payment supply chain to support growth in 2025. On an operational level, we continue to lean into active cost management and full integration to drive efficiencies. We reduced our overall operating expenses by 4 million, or 17%, to a total of 18.7 million in 2024. This decrease builds on the 43% decrease we had in 2023, where we spent a total of 22.6 million. coming from 40 million in 2022. Overall, we have managed to reduce our operating expenses by 53% since 2022. The reduction in the operating expenses is most impactful in Q4 of 2024, where we are starting to see initial impact of the saving we initiated during this year. We fully integrated our marketing and supply teams with the goal of building the operational infrastructure and stable supply chain we need to drive growth in Germany in 2025. As a positive upside, we started to see the first results of our efforts in 2024. We imported a total of 11 new strains in Germany in the second half of 2024, with our integrated supply chain for an upside in sales of about 14% in Germany. In total, we added three new suppliers and launched 16 new strains in 2024. When we look at the adjusted EBITDA after all these measures, our adjusted EBITDA in Q4 was a gain of 0.5 million versus a loss of 4.3 million in Q4 2023, an improvement of almost 5 million. In Q4, we moved into Positive Adjusted Year Tinder. When we look at the full year, we see a loss of 1.1 million for 2024 versus an 8 million loss in 2023, an improvement of almost 7 million. Moving on to the local level, In Germany, in addition to creating a stronger, fully integrated supply chain, we continue to develop the network of pharmacies we work with directly and worked on building a stronger sales team, consolidating our position as one of the top 10 medical cannabis brands in Israel. Our sales increased by over 183% in 2024 versus 2023, reaching 15.5 million. with supply being the limiting factor, especially in Q4. What I think best sums up the results in Germany is this. Germany made up 40% of IMC total revenue in the second half of 2024 versus 11% in all of 2023. Looking at these results, it is clear that the strategic shift we made to concentrate our resources on the German market was the right one. In Israel, our team managed to mitigate the impact of the war on our business, the decline in the number of medical cannabis patients, as well as the shift in focus and resources towards the German market. On an operational level in Israel, we launched or re-launched 27 strains across six bands in 2024, maintaining top-line sales. In addition, we moved to a different production facility to reduce our production cost. We expect to see the full effect of this move in 2025. We took a good look at our distribution, outsourcing financing distribution network and adding distribution partners, further reducing costs and improving service. We spent the better part of 2024 clearing out slow-moving non-premium stock and all inventory for about $3.9 million. The quality of this product was not one that we as IMC can stand behind. This impacted our cost of sales, gross margin, and gross profit. In Q4, we cleared out final $0.7 million. We do not anticipate a similar scale of write-off in 2025. To sum up 2024, I'm delighted with the progress we made internally, both strategically and operationally, while delivering growth. We now have a solid foundation, which is the right size to build on in 2025. You can clearly see the progress we made in 2024 in the results. When we look towards 2025, we will be moving our focus from internal to external, while working a strategic tightrope. While we need to invest to drive growth in Germany, on the other hand, we do not want to lose the efficiency and agility in our lean structure. I especially look forward to seeing the results of our new solid integrated supply chain in Q1, which is shaping up to be the best quarter in sales we have had to date in Germany. I will now And the call over to Uwe, who will review our fourth quarter and full year 2024 financial results. Uwe?