AKANDA CORP. (AKAN) - Form 20-F Summary
Business Context and Reporting Period
Company: Akanda Corp. (Nasdaq: AKAN)
Reporting Period: Fiscal Year Ended December 31, 2024
Accounting Basis: International Financial Reporting Standards (IFRS)
Business Overview: Akanda is an early-stage cannabis cultivation and distribution company. During 2024, the company exited its European operations (selling its Portuguese subsidiary RPK and terminating UK operations via Canmart) to focus on a new hemp and THC/CBD farming facility in British Columbia, Canada. The company is also pursuing a business combination with First Towers & Fiber Corp. (FTFC), a telecommunications infrastructure company.
Key Financial Metrics (Year Ended Dec 31, 2024)
| Metric | 2024 (USD) | 2023 (USD) |
|---|---|---|
| Revenue | $836,664 | $423,683 |
| Gross Profit | $208,382 | $59,337 |
| Operating Loss | $(4,382,482) | $(3,658,798) |
| Net Loss (Continuing Ops) | $(3,268,409) | $(3,712,377) |
| Loss from Discontinued Ops | $(827,620) | $(28,562,693) |
| Total Net Loss | $(4,096,029) | $(32,275,070) |
| Cash and Cash Equivalents (End of Period) | $3,838,650 | $82,816 |
| Total Assets | $7,914,083 | $8,839,993 |
| Total Liabilities | $3,637,545 | $12,668,885 |
| Shareholders' Equity | $4,276,538 | $(3,828,892) |
Note: The significant reduction in 2024 Net Loss compared to 2023 is primarily due to the absence of a $24.7 million impairment loss recorded in 2023 related to discontinued operations.
Material Changes vs. Prior Period
- Discontinued Operations: The company sold its Portuguese subsidiary, RPK, in March 2024 for $2.0 million, recognizing a gain of $198,780. RPK results are now classified as discontinued operations. The 2023 loss included a massive impairment charge related to RPK and other assets.
- Revenue Growth: Revenue nearly doubled to $836,664, driven by increased sales of medical cannabis products by the UK subsidiary, Canmart, prior to its shutdown.
- Equity Position: Shareholders' equity turned positive ($4.3 million) from a deficit of $(3.8 million) in 2023, largely due to raising approximately $11.5 million through public equity offerings and pre-funded warrants in 2024.
- Debt Reduction: Total liabilities decreased significantly from $12.7 million to $3.6 million, driven by the derecognition of RPK's debt upon sale and the repayment of various loans.
Guidance, Outlook, and Risks
Outlook and Strategy:
- UK Exit: The Board announced in March 2025 the cessation of Canmart (UK) operations due to licensing costs and legal exposure.
- BC Facility: The company is developing a hemp and THC/CBD facility in Gabriola Island, BC. A hemp license was obtained in September 2024, triggering a $750,000 milestone payment. No cultivation has commenced as of the filing date.
- Business Combination: Akanda entered a Share Exchange Agreement in March 2025 to combine with First Towers & Fiber Corp. (FTFC). The deal involves exchanging FTFC shares for Akanda shares or cash, with Akanda agreeing to raise an additional $4M-$10M post-closing.
Key Risks and Contingencies:
- Going Concern: The auditor has raised substantial doubt about the company's ability to continue as a going concern due to accumulated losses and reliance on external financing.
- Litigation: The company faces ongoing litigation from former executives (Shailesh Bhushan, Dallas Dunkley) and has settled claims with former executives (Louisa Mojela, Tejinder Virk, Trevor Scott, Vidya Iyer) in 2024.
- Related Party Transactions: Significant loans were advanced to FTFC (controlled by a director) totaling $400,000 by April 2025. The company also has outstanding loans to Halo (controlled by the Interim CEO).
- Internal Controls: Management identified a material weakness in internal controls over financial reporting due to inadequate staffing and lack of segregation of duties.
Investor Verification Checklist
- Capital Sufficiency: Verify the company's ability to fund the BC facility and the FTFC combination without further dilutive equity raises, given the "Going Concern" warning.
- FTFC Deal Terms: Review the definitive Share Exchange Agreement to understand the dilution impact (approx. 15.3 million new shares) and the $14.1 million cash obligation to FTFC shareholders.
- Legal Exposure: Monitor the status of the Shailesh Bhushan lawsuit (claiming ~CAD $272k) and the Dallas Dunkley wrongful dismissal claim ($200k).
- BC Milestones: Confirm the timeline for THC/CBD licensing and the associated milestone payments required to the land seller.
- Related Party Loans: Assess the recoverability of the $400,000+ loaned to FTFC and the $15,219 advanced to Halo.