Business Context and Reporting Period
This Form 6-K filing by Akanda Corp. covers the six-month period ended June 30, 2025. The Company, a foreign private issuer, operates primarily in the cannabis sector but is undergoing a significant strategic pivot. During the reporting period, Akanda ceased operations of its UK subsidiary, Canmart, reclassifying its results as discontinued operations. The filing also details a major business combination with First Towers & Fiber Corp., a telecommunications infrastructure developer in Mexico, which closed in August 2025 (subsequent to the reporting period).
Key Financial Metrics
Revenue: $0. The Company recognized no revenue for the six months ended June 30, 2025, as its primary operating subsidiary (Canmart) was dissolved and reclassified as a discontinued operation.
Profitability: The Company reported a net loss of $815,001 for the six months ended June 30, 2025, compared to a net loss of $2,682,890 in the prior year period. This improvement was driven by a gain of $589,292 from discontinued operations and reduced operating expenses.
Cash Flow:
- Operating activities used $375,604 in cash.
- Investing activities provided $173 in cash.
- Financing activities used $522,406 in cash, primarily due to loan repayments.
Debt and Liquidity: The Company has no off-balance sheet arrangements. As of June 30, 2025, the Company had advanced $423,000 to First Towers under a bridge loan agreement. Contractual lease obligations total $216,000 over the next five years.
Material Changes vs. Prior Period
Operating Expenses: Total operating expenses decreased significantly from $2,159,768 in the prior year to $1,490,756 in the current period.
- Consulting Fees: Dropped from $1,510,663 to $863,287 due to reduced corporate activity and fewer public offerings.
- Depreciation: Decreased from $102,051 to $84,788 due to lower lease payments on new office space.
- Personnel Expenses: Increased slightly from $209,106 to $226,822 due to changes in management.
Discontinued Operations: The prior year included a loss of $405,582 from discontinued operations (RPK), whereas the current period recorded a gain of $589,292 from the discontinued operations of Canmart.
Other Income/Expenses: The Company recorded a gain on debt settlement of $21,575 and a foreign exchange gain of $44,521, contrasting with a loss on debt settlement of $232,375 and a foreign exchange loss of $132,441 in the prior year.
Guidance, Outlook, and Subsequent Events
Business Combination: On August 21, 2025, Akanda closed its business combination with First Towers & Fiber Corp. First Towers is now a wholly-owned subsidiary. Akanda assumed approximately $4.9 million in First Towers' indebtedness (PGC and Dunstan notes) and issued a $14.1 million promissory note to a First Towers shareholder.
Capital Raising: On September 12, 2025, the Company completed a $12 million convertible note offering. Proceeds are designated for marketing ($3.5 million), site development ($3 million), working capital, and debt repayment. A $3.5 million fee was paid in advance to an IR agency for marketing services.
Stock Split: A 1-for-3.125 reverse stock split was implemented on August 26, 2025. All historical share data in this filing has been retroactively restated.
Risks: Key risks include the successful integration of First Towers, regulatory changes in the cannabis industry, the viability of product offerings, and the Company's ability to maintain its Nasdaq listing.
Investor Verification Checklist
- Revenue Visibility: Verify the timeline for revenue generation from the new First Towers telecommunications business, given the complete cessation of cannabis revenue.
- Debt Burden: Confirm the total outstanding debt load post-closing, including the $14.1 million consideration note, the $4.9 million assumed debt, and the new $12 million convertible notes.
- Shareholder Dilution: Assess the potential dilution from the issuance of Class A and Class B Special Shares and the conversion features of the new debt instruments.
- Marketing Expenditure: Review the $3.5 million upfront payment to the IR agency and the expected ROI on this marketing spend.
- Liquidity Position: Evaluate the Company's cash runway given the negative operating cash flow and significant debt service obligations.