IM Cannabis
IM Cannabis announced to investors earlier this week that on Wednesday, July 13, it was warned its stocks could soon be removed from the NASDAQ stock exchange unless its stock price rises above $1.
The international cannabis company, which sells products to both the medical and adult-use markets across Canada, Israel and Germany, launched a secondary listing on the NASDAQ last March, seeing its share price at launch hit around $10.
Since then, IMC’s share price, like many of its peers, has experienced a long and consistent downward trajectory, seeing it cross the sub-$1 threshold on May 27, 2022 and failing to recover ever since.
According to a ‘notification letter’ from the NASDAQ Stock Market LLC, its listing rules require ‘listed securities to maintain a minimum bid price of $1 per share’, and that a failure to meet the minimum bid price for ‘30 consecutive business days’ could see it face delisting.
While the company’s shares will remain on the exchange for now, if the company does not ‘regain compliance’ within 180 days, giving it until January 09, 2023, IMC may face delisting, though the notice stipulates it could be eligible for additional time.
In order to regain compliance, its minimum bid price must return to at least $1 for 10 consecutive business days.
Earlier this year, the company’s CEO Oren Shuster told BusinessCann that the company was shifting its focus away from rapid growth through M&As towards delivering organic growth.
Considering its latest financial figures, released two weeks before its stock dropped below $1, it’s unclear whether this has yet been achieved.
In the three months to March 31, 2022, the company reported record revenues of $23.6 million, rising 169% year-on-year and 18% on its previous quarter.
This was driven by an increase in the amount and average selling price of dried flower throughout the year, which it attributes to sales in its ‘acquired pharmacies in Israel’, seeing 3,035kg sold at an average price of $6.23 per gram, up from 1,185kg sold for an average of $4.94 per gram a year earlier.
While its increased presence in Israel led to increased revenues, it also saw administrative costs nearly double from $4.9m to $9m year-on-year, while its EBITDA losses skyrocketed from $1m to $4.5m.
Ambitiously, the company said it plans to focus on ‘key operational initiatives to improve yield and reduce volume-based costs’, which it says will help it achieve positive adjusted EBITDA ‘on a run rate basis’ in the second quarter of this year.
It is worth noting that recent NASDAQ debutant Akanda could soon be in a similar position, though a recent run of positive sentiment has seen it return just above the $1 threshold.
Had its share price not briefly risen above $1 between June 16 and June 21 this year, Akanda’s share price would have sat below $1 for a total of 35 days, including an 18-working-day stint between May 24 and June 15, and a 17-day stint between June 22 and July 15.
DeepVerge
DeepVerge has continued its blistering run of fortune, seeing stocks jump 42% this week, the second double-digit climb this month.
It comes amid another week of significant developments for the company, including its Annual General Meeting (AGM) on July 20.
On the same day, DeepVerge released an RNS announcing plans to ‘explore options’ for its Labskin division, which it announced earlier this month had generated more than £1m in sales and signed 20 new sales and marketing agreements so far in 2022.
The board says there has been a ‘significant reorganisation’ of the group, which incorporates both its Labskin division, including its popular Skin Trust Club business, and its environmental division, including its Modern Water products.
These two entities have now been separated and will ‘now run independently of each other’.
According to the company’s CEO Gerard Brandon, the pace of growth in its Skin Trust Club business has meant ‘demand is far outstripping supply’ for its home test kits, alongside the ‘list of Labskin services from skin care manufacturers seeking to join Skin Trust Club marketplace’.
He added that ‘the board believe it is necessary to explore options to maintain this level of growth within an expanded group structure’, while highlighting recent interest and increased discussions with ‘Tier 1 skincare corporations, US drugstores and venture capital backed companies’.
While there has been no outright mention of a sale, investor speculation is now running rife, with suggestions the division could potentially be sold to a number of suitors, including Unilever and Walgreens Boots Alliance.
Speculation has also turned to how this potential sale could be priced, with Mr Brandon repeatedly referring to the division as a ‘unicorn’, but the entire company’s market value is currently sitting at just under £35m.
Oxford Cannabinoid Technologies & Ananda Developments
Oxford Cannabinoid Technologies (OCT) and Ananda, both pre-revenue companies, also released updates regarding the progress of their operations this week, neither of which appeared to drive positive momentum in their respective share prices.
OCT announced on Wednesday that it has appointed Simbec-Orion, a clinical research organisation, to conduct its first Phase 1 clinical trials in humans for its lead compound.
The trial of OCT46120 will commence in the UK in Q1 2023, with a full report on the safety and tolerability of its compound due for Q2 2023.
The announcement comes ahead of the company’s latest update to investors, due to take place on Monday July 25, but failed to stop the company’s shares dropping by around 6% throughout the week.
John Lucas, OCT’s CEO, said: “This is an important step along the development path for OCT461201, as we advance into clinical trials in healthy volunteers.”
Meanwhile Ananda, which is listed on the Aquis Exchange, also released an update for investors detailing the progress it has made on its genetic stabilisation programme, field trials, and full acquisition of subsidiary DJT Plants Limited.
It will reportedly complete the self-crossing of the first generation of cannabis plants, of which there will be a total of six, within the next few weeks, and says field trials to assess the performance of various cannabis cultivars in the conditions at its Lincolnshire facility are ‘underway’.
Furthermore Ananda announced that its ongoing acquisition of the 50% of DJT it does not currently own is currently being held up by one outstanding item, a sub-lease which will allow it to expand its footprint significantly, which it says will be ‘desirable if a third party has interest in a medical cannabis growing footprint in the UK’.
Its CEO Melissa Sturgess said: “From a commercial perspective, we continue to note the increase in UK based medical cannabis patient numbers from around 3,000, when the research licence was granted, to approximately 17,000 patients currently. The growth trajectory is right for our business plan.”
