Business Context and Reporting Period
Company: Akanda Corp. (Nasdaq: AKAN)
Filing Type: Annual Report on Form 20-F
Reporting Period: Fiscal year ended December 31, 2025
Accounting Basis: International Financial Reporting Standards (IFRS)
Business Overview: Akanda is a Canadian holding company operating in two primary segments: telecommunications infrastructure (via its subsidiary First Towers in Mexico) and cannabis cultivation (via a facility in British Columbia, Canada). The company discontinued its European cannabis operations (Canmart) in May 2025 and sold its Portuguese cultivation subsidiary (RPK) in March 2024.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Revenue | $258,075 | $0 |
| Net Loss | $(46,859,311) | $(4,096,029) |
| Net Loss from Continuing Operations | $(47,366,915) | $(3,311,823) |
| Gain from Discontinued Operations | $507,604 | $(784,206) |
| Operating Cash Flow | $(6,729,048) | $(3,980,365) |
| Investing Cash Flow | $(7,451,887) | $(1,016,165) |
| Financing Cash Flow | $11,678,315 | $8,989,434 |
| Total Assets | $6,195,555 | $7,914,083 |
| Total Liabilities | $18,185,992 | $3,637,545 |
| Working Capital Deficit | $(2,597,230) | $(1,418,036) |
| Common Shares Outstanding (Dec 31, 2025) | 1,983,546 | N/A |
Note: Revenue in 2025 is derived entirely from the First Towers infrastructure segment. The 2025 net loss includes a significant non-cash impairment charge.
Material Changes vs. Prior Period
- Acquisition of First Towers: In August 2025, Akanda acquired First Towers, a Mexican telecommunications infrastructure company. This transaction introduced revenue ($258,075) but also significant debt and goodwill, which was subsequently fully impaired.
- Discontinued Operations: The company liquidated its UK subsidiary, Canmart, in May 2025, resulting in a gain on loss of control of $533,617. The Portuguese subsidiary, RPK, was sold in 2024.
- Impairment Loss: A massive impairment loss of $44,812,112 was recorded in 2025. This included the full write-off of $39,572,129 in goodwill related to the First Towers acquisition, plus impairments to property, plant, and equipment ($2,943,313) and land ($2,158,885).
- Debt Assumption: The company assumed approximately $20 million of First Towers indebtedness, including a $14.1 million Consideration Note and convertible debentures. While some was prepaid, significant secured promissory notes remain outstanding.
- Reverse Stock Splits: The company implemented multiple reverse stock splits in 2025 and early 2026 (1-for-3.125, 1-for-5, and 1-for-4.5) to maintain Nasdaq listing compliance.
Guidance, Outlook, Risks, and Unusual Items
Management Commentary and Outlook
Management states that the company is an early-stage entity with limited operating history. The business model relies on the successful integration of First Towers and the development of the British Columbia cannabis facility. The company explicitly states it requires additional funding to continue operations and cannot be certain that financing will be available on reasonable terms.
Going Concern Warning
The independent auditor has issued a "Going Concern" opinion. The company's significant operating losses, cash outflows, and working capital deficit raise substantial doubt about its ability to continue as a going concern. The financial statements do not include adjustments that might result from this uncertainty.
Key Risks
- Liquidity and Financing: Heavy reliance on equity and debt financing; failure to raise capital could force a discontinuation of operations.
- Regulatory: Exposure to evolving cannabis laws in Canada and Mexico, and U.S. federal laws regarding cannabis (Schedule I status).
- Integration: Risks associated with integrating First Towers and retaining key personnel.
- Legal Proceedings: Ongoing litigation involving former executives (e.g., Shailesh Bhushan) and an SEC investigation regarding marketing efforts and share issuances.
- Nasdaq Compliance: The company received a notification of non-compliance from Nasdaq in May 2026 for failing to file its 2025 20-F on time. Compliance is expected upon the filing of this report.
Unusual Items
- Marketing Expenses: The company paid approximately $6.7 million to "IR Agency" for marketing services, funded largely by proceeds from convertible notes.
- Related Party Transactions: Significant loans and transactions with entities controlled by directors and the Interim CEO (e.g., Halo Collective, First Towers prior to acquisition).
Investor Verification Checklist
- Going Concern Status: Verify the company's ability to secure immediate working capital given the auditor's warning and negative cash flow.
- Debt Covenants: Review the terms of the $14.1 million Consideration Note and other secured promissory notes for maturity dates and default triggers.
- First Towers Revenue Quality: Confirm the sustainability of the $258k revenue from First Towers and the status of the 20-year lease with Telefonica.
- Legal Exposure: Monitor the status of the SEC investigation and the civil claim filed by former CFO Shailesh Bhushan.
- Nasdaq Listing: Confirm that the filing of this 20-F has resolved the May 2026 non-compliance notice to avoid delisting.
- Share Dilution: Assess the impact of the Class B Special Shares (convertible to common) and outstanding convertible notes on future share count.