Good morning, and welcome to IM Cannabis’ First Quarter 2025 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 IM Cannabis, Chief Executive Officer, Oren Shuster, and Chief Financial Officer, Uri Birenberg. The earnings and press release that accompanies this call is available on the Investor Relations section of our website at investors.imcannabis.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 of 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 SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.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 in Canadian dollars, unless otherwise stated. With that, it’s my pleasure to turn the call over to Oren Shuster, CEO of IM Cannabis. Oren, please go ahead.

Thank you, Anna. Good morning, everyone, and thank you for joining us today. While presenting the 2024 full year results in March, I focused on the progress we made internally, both strategically and operationally, the efficiencies and integration to build a solid right-sized foundation to deliver on in 2025. In Q1 2025, we can see in the group’s financial results that we have hit our target. In Q1, IMC reached net profit with an 87% improvement in our gross margin versus Q1 2024. Our focus continues to be on execution, shifting our resources to where we see the biggest ROI and leaning into our integrated structure. In Q1, with our integrated supply chain, we launched a total of 12 new strains in Germany, driving about EUR 3 million or 39% of our cannabis FLOWR sales in Germany. To put this into perspective, in the second half of 2024, we imported a total of 11 new strains to Germany for an upside in sales of about 14% in Germany. In Q1 of 2025 alone, we have already exceeded the last 6 months of 2024. Needless to say, I’m very proud of the work the entire team, both in Israel and in Germany put in to deliver these results. Moving on to Israel, we see that the shifting focus and resources towards the German market and supply delays impacted our Israeli business. While the Israeli revenue declined by 56% versus Q1 2024, our German business grew 569% versus Q1 2024, offsetting the revenue decline in Israel. In addition, we are seeing that the cost-cutting measures produced by shifting our production facility in Israel in 2024 are flowing through to the financial results, leading to the increase in gross margin of 87% and an increase in gross profit of 94%. To sum up, the first quarter of 2025. I’m delighted to see how the efficiencies and integration of the past 2 years is starting to be visible in our financial results. Our goal was for the group to be positive, which we achieved this quarter. Our target now, is to continue to execute our strategy. I will now hand the call over to Uri, who will review our first quarter 2025 financial results. Uri?

Thank you, Oren. Before reviewing our Q1 results, I would like to emphasize one of this quarter’s milestones. The adjusted EBITDA in Q1 2025 resulted in a profit of $0.6 million compared to an adjusted EBITDA loss of $2.2 million in Q1 2024, which is an improvement of almost $3 million. The company achieved a net profit of approximately $0.2 million. Our Q1 results were mainly impacted by the following points. The German region revenue in Q1 increased by 569% versus Q1 2024, and we continued with our expense reduction process which resulted in a decrease in our operating expenses of approximately 56% versus Q1 2024. I will now take you through the overview of the Q1 2025 financial results for the company’s operations. Revenues for Q1 2025 were $12.5 million compared to $12.1 million in Q1 2024, an increase of $0.4 million or 4%. The increase is mainly attributed to the accelerated growth in Germany with an increase in revenue of $6.6 million and decreased revenue in Israel of $6.1 million net. The decrease is attributed to the Oranim deal cancellation, which resulted in a decrease in revenue of approximately $3.5 million compared to Q1 2024. Germany’s share of total revenue in Q1 2025 has significantly increased compared to the corresponding period in 2024 to 62%. This increase has had a considerable impact, reflected in a higher average price due to favorable market conditions and growing demand. The cost of revenue for Q1 2025 were $9.1 million compared to $10.3 million in Q1 2024, a decrease of $1.2 million or 12%. This is mainly due to the $0.6 million slow inventory clearing in Q1 2024, and other expenses decreased in Q1 2025 of about $0.6 million net. Gross profit for Q1 2025 was $3.4 million compared to $1.8 million…

Thank you. To sum up Q1 2025, I am delighted to say that the progress we have made internally, both strategically and operationally, is starting to impact the group’s financial results directly. As of this quarter, we are profitable. I will now hand the call over to the operator to begin our question-and-answer session. Operator?

[Operator Instructions] We have our first question from Oscar.

Yes. Hi. My question is, why is it important to – how do I say this, for the upcoming meeting of accepting the 25% of the new company. Why is that important given the time of strict capital, why is that – yes, why is that important the upcoming meeting and being approved of us approving the 25% ownership of Focus? Yes, why is that point at the moment right now? Thank you.

It’s something that we are working on for quite some time on the regulatory side. And it just happened now, but it’s a long process. And also, Uri I don’t know if you want to relate to that?

Yes. I will take it. So, basically, since we have a structure of companies, there are all kind of balances that we want to clear between companies and to move them from, let’s call it, long-term loan to investment as equity. And according to tax regulations in order to do it in our country, you are supposed to hold 100% of the – at least for the Focus company. So, based on advice we received, the best way of doing it without getting into troubles of consuming it as revenue for tax purposes and those kind of act from the tax authorities, we must hold 100% of the Focus shares. So, we had to make some kind of a deal and use external valuation for the value of the Focus for the rest of the 26%. So, we would be able to acquire it and to be able to protect the company from the tax perspective.

Okay. Thank you.

Thank you.

[Operator Instructions] There are no further questions.

Thank you, operator, and thank you all for joining our call today.