Flora Growth Corp.
For the period ended Sep 30, 2025. Filed Nov 5, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 5, 2025
ZSTK$2.52-1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-01.
0001062993-25-013438
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0001062993-25-016503
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 193 previous paragraphs and 151 current paragraphs.
69 unchanged; 41 reworded; 38 added; 82 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 7 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (38)
Current report
Flora Growth Corp. ("Flora" or the "Company"), which will be rebranded as ZeroStack, is the first and largest decentralized AI treasury company that is investing in the future of AI infrastructure through strategic ownership in 0G Tokens, an AI infrastructure company that has created an open and decentralized AI network fueled by the 0G Token.
Current report
Cryptocurrency Treasury Strategy
Current report
On May 2, 2025, the Company entered into a securities purchase agreement (the "May 2025 Securities Purchase Agreement") with certain investors (the "May 2025 Investors") in connection with the issuance and sale by the Company to the May 2025 Investors via a private placement (the "May 2025 Private Placement") of an aggregate of 80,340 common shares at a purchase price of $11.70 per share (the "May 2025 Common Shares") and 18,642 pre-funded warrants of the Company at a purchase price of $11.6961 per warrant (the "May 2025 Pre-funded Warrants") each to purchase one common share (each, a "May 2025 Pre-funded Warrant Share") which were immediately exercisable and expire when exercised in full, at an exercise price of $0.0039 per share.
Current report
The net proceeds from the sale of the May 2025 Common Shares and the May 2025 Pre-funded Warrants were approximately $1.1 million after deducting estimated expenses relating to the May 2025 Private Placement. The Company used $0.4 million of the net proceeds from the May 2025 Private Placement to purchase Solana, $0.4 million of the net proceeds from the May 2025 Private Placement to purchase Ethereum, $0.1 million of the net proceeds from the May 2025 Private Placement to purchase Sui, $0.1 million of the net proceeds from the May 2025 Private Placement to purchase Ripple (collectively, the "Owned Cryptocurrencies"), and the balance of the net proceeds from the May 2025 Private Placement for general corporate and working capital purposes and to pay any fees and expenses in connection with the issuance of the May 2025 Common Shares and the May 2025 Pre-funded Warrants.
Current report
On September 19, 2025, the Company entered into securities purchase agreements with certain investors pursuant to which the Company agreed to sell and issue the following securities in private placement offerings (collectively, the "PIPE Offering"): (i) 116,340 common share units ("PIPE Common Share Units") at a unit price of $25.19, payable in cash, for aggregate gross proceeds of $2.9 million, with each unit consisting of one common share ("PIPE Common Share") and 0.2 of a warrant to purchase one common share at an exercise price of $25.19 ("PIPE Warrant"); (ii) 412,037 pre-funded warrant units ("PIPE Pre-Funded Warrant Units") at a unit price of $25.1899, payable in cash, for aggregate gross proceeds of $10.4 million, with each unit consisting of one pre-funded warrant to purchase one common share at an exercise price of $0.0001 ("PIPE Pre-Funded Warrant") and 0.2 of a PIPE Warrant; (iii) 8,546,955 PIPE Pre-Funded Warrants at a unit price of $25.1899, payable in 71,766,135 0G Tokens based on an agreed value of $3 per 0G Token; and (iv) an unsecured convertible note in an aggregate original principal amount of 95,333 Solana (the "PIPE Note").
Current report
On September 26, 2025, in connection with the first closing of the PIPE Offering, the Company issued 116,340 PIPE Common Share Units and 412,037 PIPE Pre-Funded Warrant Units for aggregate gross cash proceeds of $13.3 million, and 2,592,212 PIPE Pre-Funded Warrants for 21,766,135 0G Tokens, valued at $54.7 million on the issuance date. The remaining 5,954,473 PIPE Pre-Funded Warrant Units were issued on October 9, 2025, for 50,000,000 0G Tokens. The PIPE Note was issued on October 24, 2025, at which date the original principal amount of 95,333 Solana was received.
Current report
On September 19, 2025, the Company entered into an arrangement with Zero Gravity Labs Inc. ("Zero Gravity") pursuant to which the Company agreed to (i) borrow 50,000,000 0G Tokens from Zero Gravity under a term loan agreement ("Loan Agreement"), and (ii) issue to Zero Gravity in a private placement offering 1,786,423 warrants to purchase one common share at an exercise price of $0.01 ("Loan Agreement Warrants"). On September 22, 2025, the Company entered into a securities purchase agreement with Zero Gravity for the issuance of an unsecured convertible note in an aggregate original principal amount of 50,000,000 0G Tokens (the "Zero Gravity Convertible Note") that will replace the Loan Agreement and Loan Agreement Warrants, subject to closing. The Zero Gravity Convertible Note was issued on October 23, 2025, at which date the 50,000,000 0G Tokens were received.
Current report
The Company intends to use the net proceeds from the PIPE Offering and the Zero Gravity Convertible Note (collectively, the "Cryptocurrency Offering") to further the Company's new digital asset treasury strategy linked to 0G Tokens, and to explore and expand the use of the native AI functionality of the 0G Tokens to enhance the business of the Company. The balance of the net proceeds will be used for general corporate and working capital purposes.
Current report
In connection with the Cryptocurrency Offering, on October 1, 2025, Mr. Clifford Starke resigned as a director and the Chief Executive Officer of the Company and Mr. Sammy Dorf resigned as the Executive Chairman of the Company.
Current report
On October 1, 2025, the Board of Directors (the "Board") appointed Mr. Daniel Reis-Faria and Michael Heinrich as non-independent directors of the Board, and in connection with their appointments to the Board, Mr. Reis-Faria, was also appointed as the Chief Executive Officer of the Company and Mr. Heinrich was also appointed as Executive Chairman effective October 1, 2025.
Current report
Sale of Legacy Hemp and Cannabis Business
Current report
On September 26, 2025, the Company transferred 100% of the issued and outstanding equity interests of the following direct and indirect wholly-owned subsidiaries, which collectively comprise the Company's legacy hemp and cannabis business: (i) Australian Vaporizers Pty LTD, an Australian limited company; (ii) Vessel Brand Canada Inc., a Canadian corporation; (iii) Klokken Aarhus Inc., a Canadian corporation; (iv) Rangers Pharmaceuticals A/S, a Danish stock-based corporation; (v) TruHC Pharma GmbH, a German limited company; (vi) Vessel Brand Inc., a Delaware corporation; (vii) High Roller Private Label LLC, a Florida limited liability company; (viii) Just Brands LLC, a Florida limited liability company; (ix) Just Brands FL LLC, a Florida limited liability company; (x) Just Brands International LTD, a United Kingdom limited company; and (xi) United Beverage Distribution Inc., a South Dakota corporation (collectively, the "Transferred Interests") to Flora Growth US Holdings LLC, a Florida limited liability company and certain noteholders ("Noteholders") of the Company, in exchange for full satisfaction of the balance receivable under the promissory notes issued by the Company to such Noteholders as part of the Company's acquisition of United Beverage Distribution Inc. on January 30, 2025.
Current report
Minimum Independent Directors Requirement
Current report
On August 25, 2025, Harold Wolkin, a director of the Company, passed away. Prior to his passing, Mr. Wolkin served as an "Independent Director", as defined in Nasdaq Listing Rule 5605(a)(2), of the Company's audit committee, the compensation committee, and the nominating and corporate governance committee of the Board. On August 26, 2025, Nasdaq was informed that because of Mr. Wolkin's passing, the Company is no longer in compliance with certain Corporate Governance Requirements as set forth in Nasdaq Listing Rule 5605.
Current report
Pursuant to Nasdaq Listing Rule 5605(b)(1), a majority of the Board of a listed company must be comprised of Independent Directors. With Mr. Wolkin's passing, the Board is currently comprised of only four members, Daniel Reis-Faria, Michael Heinrich, Edward Woo and Manfred Leventhal. Only two of the four, Mr. Woo and Mr. Leventhal, qualify as Independent Directors. Therefore, the Company's Board is no longer comprised of a majority of Independent Directors as required by Nasdaq Listing Rule 5605(b)(1).
Current report
Pursuant to Nasdaq Listing Rule 5605(c)(2)(A), a listed company must have an audit committee of at least three members, each of whom must be an Independent Director and meet the criteria for independence set forth in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). With Mr. Wolkin's passing, the Company's audit committee is currently comprised of only two members, each of whom meet the independence requirements set forth in Nasdaq Rule 5605(a)(2) and Rule 10-A3(b)(1) of the Exchange Act. Therefore, the Company's audit committee is no longer comprised of at least three members meeting the aforementioned independence requirements as required by Nasdaq Listing Rule 5605(c)(2)(A).
Current report
The Company is in the process of reviewing and evaluating potential options to regain compliance with Nasdaq Listing Rules 5605(b)(1) and 5605(c)(2)(A) within the cure period set forth in 5605(b)(1)(A), which will be before the earlier of one year from August 25, 2026 and the next annual meeting.
Current report
The Company primarily generates revenue as a global pharmaceutical distributor through its wholly owned subsidiary Phatebo.
Current report
Non-Operating Loss (Income)
Current report
Loss from discontinued operations includes the net loss, net of tax, of the Company's legacy hemp and cannabis business sold on September 26, 2025. It also includes an expected gain on the disposal as the expected sale price exceeded the carrying value of the assets being sold.
Current report
Revenue totaled $9.8 million and $7.2 million for the three months ended September 30, 2025 and 2024, respectively. The revenue for both the three months ended September 30, 2025 and 2024 was generated entirely by the Company's Phatebo subsidiary.
Current report
Operating expenses totaled $3.6 million and $2.6 million for the three months ended September 30, 2025 and 2024, respectively. The increase is driven by a contingency loss.
Current report
Depreciation and amortization expenses were less than $0.1 million for both the three months ended September 30, 2025 and the three months ended September 30, 2024.
Current report
Other Expenses
Current report
Non-operating Loss (Income)
Current report
Loss from discontinued operations totaled $3.0 million in the three months ended September 30, 2025 compared to $1.5 million in the three months ended September 30, 2024. The increase in loss in the three months ended September 30, 2025 was driven by $1.4 million in goodwill impairment recorded at the former TruHC subsidiary.
Current report
For the Nine Months Ended September 30, 2025 and 2024
Current report
Revenue totaled $26.3 million and $28.2 million for the nine months ended September 30, 2025 and 2024, respectively. The revenue for both the nine months ended September 30, 2025 and 2024 was generated entirely by the Company's Phatebo subsidiary.
Current report
Operating lease expenses totaled $0.1 million for both the nine months ended September 30, 2025 and the nine months ended September 30, 2024.
Current report
Depreciation and amortization expenses totaled less than $0.1 million for both the nine months ended September 30, 2025 and the nine months ended September 30, 2024.
Current report
Other Expenses
Current report
Non-operating (Income) Loss
Current report
Loss from discontinued operations totaled $4.3 million for both the nine months ended September 30, 2025 and the nine months ended September 30, 2024.
Current report
The Company recorded a net loss of $9.8 million for both the nine months ended September 30, 2025 and the nine months ended September 30, 2024.
Current report
Cash provided by Investing Activities
Current report
On September 19, 2025, the Company entered into the PIPE Offering pursuant to which the Company agreed to sell and issue the following securities in private placement offerings: (i) 116,340 PIPE Common Share Units at a unit price of $25.19, payable in cash, for aggregate gross proceeds of $2.9 million, with each unit consisting of one PIPE Common Share and 0.2 PIPE Warrants to purchase one common share at an exercise price of $25.19; (ii) 412,037 PIPE Pre-Funded Warrant Units at a unit price of $25.1899, payable in cash, for aggregate gross proceeds of $10.4 million, with each unit consisting of one PIPE Pre-Funded Warrant to purchase one common share at an exercise price of $0.0001 and 0.2 of a PIPE Warrant; (iii) 8,546,955 PIPE Pre-Funded Warrants at a unit price of $25.1899, payable in 71,766,135 0G Tokens based on an agreed value of $3 per 0G Token; and (iv) the PIPE Note in an aggregate original principal amount of 95,333 Solana.
Current report
On September 26, 2025, in connection with the first closing of the PIPE Offering, the Company issued 116,340 PIPE Common Share Units and 412,037 PIPE Pre-Funded Warrant Units for aggregate gross cash proceeds of $13.3 million, and 2,592,212 PIPE Pre-Funded Warrants for 21,766,135 0G Tokens, valued at $54.7 million on the issuance date. The remaining 5,954,473 PIPE Pre-Funded Warrant Units were issued on October 9, 2025, for 50,000,000 0G Tokens. The PIPE Note was issued on October 24, 2025, at which date the original principal amount of 95,333 Solana was received.
Current report
On September 19, 2025, the Company entered into an arrangement with Zero Gravity pursuant to which the Company agreed to (i) borrow 50,000,000 0G Tokens from Zero Gravity under the Loan Agreement, and (ii) issue to Zero Gravity in a private placement offering 1,786,423 Loan Agreement Warrants. On September 22, 2025, the Company entered into an agreement with Zero Gravity for the issuance of the Zero Gravity Convertible Note in an aggregate original principal amount of 50,000,000 0G Tokens that will replace the Loan Agreement and Loan Agreement Warrants, subject to closing. The Zero Gravity Convertible Note was issued on October 23, 2025, at which date the 50,000,000 0G Tokens were received.
Removed paragraphs (82)
Previous report
We are a multi-national cannabis company that manufactures and distributes consumer packaged goods and distributes medicinal cannabis and pharmaceutical products. Flora exists to create a world where the benefits of cannabis are accessible to everyone. Our business strategy is built on two core pillars: House of Brands and Commercial & Wholesale. This strategy allows us to access to markets around the globe based on the legal standing of cannabis in the geographical locations in which we operate. Our approach to executing our strategy enables us to develop distribution networks, build customer bases, establish operations as regulatory frameworks evolve and allow for expanded access to cannabis and its derivatives.
Previous report
Our brand portfolio consists of a mix of products across multiple categories, including food and beverage, nutraceuticals, cannabis accessories and technology, personal care, and wellness. Flora's consumer packaged goods brands allow Flora to move assertively into nascent markets, develop customer bases and distribution channels, and gather consumer insights that would not be possible with traditional cannabis sales alone. Through this channel we seek to build loyalty, credibility and enjoy healthy margins that help to support the rapid growth of our business.
Previous report
House of Brands
Previous report
JustCBD is Flora's leading consumer packaged goods brand. JustCBD was launched in 2017 with a mission to bring high-quality, trustworthy, and budget-friendly CBD products to market. JustCBD products are available for purchase in smoke and vape shops, clinics, spas and pet stores, as well as other independent non-traditional retail channels. JustCBD's products are both internally and third-party lab-tested to ensure quality.
Previous report
Vessel is Flora's cannabis accessory and technology brand currently servicing the United States and Canada through direct-to-consumer and retail sales. Vessel's products include cannabis consumption accessories, personal storage, and travel accessories for the vape and dry herb categories, which are sold to consumers, dispensaries, smoke shops and cannabis brands. Vessel has been fully integrated into JustCBD and now benefits from operational, logistical and sales synergies with JustCBD.
Previous report
Australian Vaporizers ("AV") was founded in 2010 and has become a prominent online retailer of vaporizers, hardware, and accessories in Australia. AV is one of the leading online authorities for aromatherapy products, specializing in dry herb vaporizers. It provides vapes, accessories and knowledge to enthusiasts and newcomers alike. Its website www.australianvaporizers.com.au is a popular destination in the country with a large database of satisfied customers.
Previous report
During 2025, we acquired United Beverage Distribution Inc. ("United"). United was founded in 2024 and is a distributor of cannabis-infused drinks. It holds supply agreements with several large national and regional beverage retailers.
Previous report
Commercial & Wholesale
Previous report
During 2024, we acquired TruHC, an early-stage cannabis company based in Hamburg, Germany. TruHC holds a GDP wholesale, and an EU-GMP processing and production license for medical cannabis. It also owns and operates an EU-GMP certified laboratory ready for instant cannabis analysis as required for the newly legalized cannabis social clubs. The facility of TruHC is a flexible production space with EU-GMP certified modules that can be extended and customized for any production process from processing to extraction. TruHC also holds a narcotic license with EU-GMP certified storage.
Previous report
Factors Impacting our Business
Previous report
Challenges in realization of overhead reductions. Management has taken, and continues to implement, various cost-saving initiatives to lower overhead costs. However, the Company has not yet reached the critical balance in reducing overhead to meet both the existing and potential market demand in aggregate. The Company strives to attain sufficient growth to cover its overhead to reach profitability. If the Company fails to grow its business or reduce its operating expenses further in the long term, it will continue to face significant cash flow deficiencies in the future and continue to be reliant on debt and/or equity financing to fund operations.
Previous report
Consistent profitability and positive operating cash flows. A key determinant of the Company's success is to deliver profitable results and positive cashflows from operating activities. The Company's results have not yet achieved the prerequisite consistency to achieve self-sufficiency. Since its inception, only the third quarter of 2023 yielded net income and positive cashflows from operating activities. There is no assurance that the Company will be able to produce adequate levels of sustained profitability and become cash flow positive. These factors, amongst others, raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are described in Note 2 of the Company's unaudited condensed interim consolidated financial statements for the six months ended June 30, 2025. For more information, see Item 1A "Risk Factors" in the Company's 2024 Annual Report.
Previous report
Acquisition strategy disadvantages include significant transaction costs and liabilities of our acquirees. The Company has historically been opportunistic and pursues acquisitions from time to time that management believes will be complementary to or synergistic to the Company's existing business. However, any such acquisitions require the Company to incur heightened upfront transaction costs and require the Company to assume certain liabilities from the acquired companies. In addition, while the Company believes such acquisitions will provide enhanced value in the long term, it is possible that the anticipated synergies from the acquisition may never be realized.
Previous report
*Diversification of cashflows.*Our sources of cash are diversified across geographic and product lines. Revenues are concentrated primarily in Germany and the United States, spanning pharmaceuticals, hemp and non-hemp consumer products and medicinal cannabis.
Previous report
*International cannabis developments.*Flora's growth is embedded in the expansion, regulation and legalization of medicinal and recreational cannabis and cannabis derivative products across the world. While medicinal cannabis has been regulated at the federal level in multiple countries, the Company is focused on the most robust markets in Germany and the European Union. We remain tuned to international developments as potentially lucrative medicinal cannabis markets open.
Previous report
*Product evolution and brand acceptance.*As the cannabis industry continues to change, divergent regulations and the corresponding resources required to introduce high-quality products are expected to impact our market share. Gaining access to continuously evolving and superior products remains a critical success factor. Our ultimate ability to produce and acquire products meeting stringent quality control standards drives the extent of consumer acceptance. Furthermore, the intrinsic value within our brands, including JustCBD and Vessel, is subject to evolving consumer sentiment.
Previous report
*Regulatory proficiency and adoption.*The markets in which Flora operates are highly regulated and require extensive experience in navigating the associated complexities. We have assembled a team with deep knowledge of the regulatory and governance environments in which the Company operates. Fundamental expertise entails compliance with product approvals, import permits, export permits, distribution licenses and other pertinent licenses.
Previous report
*Integration of acquired companies.*Our growth has been fueled substantially by the acquisitions of JustCBD, Vessel and Phatebo. Our continued ability to extract incremental synergies from a group of diversified entities is a key determinant of our ability to expand organically.
Previous report
The Company primarily generates revenue as a distributor of pharmaceutical goods, and a manufacturer and reseller of a range of cannabis-based and complementary products. The Company has two major revenue groups, which are also its two reportable segments:
Previous report
(1) House of Brands; and
Previous report
(2) Commercial and Wholesale.
Previous report
These segments reflect how the Company's operations are managed, how the Company's Chief Executive Officer, who is the chief operating decision maker, allocates resources and evaluates performance, and how the Company's internal management financial reporting is structured.
Previous report
Promotion and communication expenses consist primarily of services engaged in marketing and promotion of our products and costs associated with initiatives and development programs and salary and benefit expenses for certain employees.
Previous report
Research and development expenses primarily consist of salary and benefit expenses for employees engaged in research and development activities, as well as other general costs associated with R&D activities.
Previous report
Non-Operating (Income) Expenses
Previous report
Insolvency of Certain Canadian and German Subsidiaries
Previous report
On March 14, 2025, each of Franchise Global Health Inc., Franchise Cannabis Corp., CBDMed Therapeutics Inc., Harmony Health One Inc., 1200325 B.C. Ltd., and Fayber Technologies Inc. (collectively, the "Canadian insolvent subsidiaries") made a voluntary assignment in bankruptcy pursuant to section 49 Bankruptcy and Insolvency Act (Canada) in the appropriate Canadian jurisdictions. On March 18, 2025, ACA Mueller ADAG Pharma Vertriebs GmbH, Sativa Verwaltungs GmbH, and Sativa Verwaltungs GmbH and Co. KG (together "the German insolvent subsidiaries") each made filings for insolvency proceedings under German insolvency laws in Kontanz, Germany. Each of the Canadian insolvent subsidiaries and the German insolvent subsidiaries was a direct or indirect subsidiary of the Company and was part of the Company's acquisition of FGH in December 2022. The Company supported the insolvencies as part of ongoing strategic changes to cut costs and streamline operations. The combined net loss and comprehensive loss of the Canadian insolvent subsidiaries and the German insolvent subsidiaries was less than $0.1 million and $0.4 million in the six months ended June 30, 2025 and 2024, respectively.
Previous report
Stop Sale Order by Florida Department of Agriculture and Consumer Services Division of Food Safety (the "Department")
Previous report
On October 31, 2023, the Department issued 340 stop sale orders on hemp extract products distributed by Just Brands primarily on the basis that such products were determined to be attractive to children with the product and/or labels in the shape of an animal, human, or cartoon; or bears any reasonable resemblance to an existing candy product, or branded food product. As a result, Just Brands has stopped distributing these products in the State of Florida. There is no assurance that these products can be sold in another jurisdiction, or at all.
Previous report
On January 22, 2024, the Department issued a stop sale order on 231 hemp extract and other products distributed by Just Brands primarily on the basis that such products were determined to be attractive to children with the product and/or labels in the shape of an animal, human, or cartoon; or bears any reasonable resemblance to an existing candy product, or branded food product. As a result, Just Brands has stopped distributing these products in the State of Florida. There is no assurance that these products can be sold in another jurisdiction, or at all.
Previous report
On April 2, 2024, the Department issued a stop sale order on 84 hemp extract and other products distributed by High Roller primarily on the basis that such products were determined to be attractive to children with the product and/or labels in the shape of an animal, human, or cartoon; or bears any reasonable resemblance to an existing candy product, or branded food product. As a result, Higher Roller has stopped distributing these products in the State of Florida. There is no assurance that these products can be sold in another jurisdiction, or at all.
Previous report
On May 7, 2024, Just Brands and the Department agreed to a settlement and general release, whereby Just Brands will remove the products subject to the Stop Sales Orders from the state of Florida, pay the Department $60,500 to reimburse the Department's attorney's fees, and accept a five-year revocation of its food permit in the state of Florida. By signing the release, Just Brands waived, settled and released all claims it had or might have against the Department.
Previous report
On June 27, 2024, Just Brands and the Department agreed to a settlement and general release, whereby High Roller will remove the products subject to the Stop Sales Orders from the state of Florida, destroy products containing controlled substances, pay the Department $5,000 to reimburse the Department's attorney's fees, and accept a two-year suspension of the manufacture, distribution and sale of gummy hemp extract products in the state of Florida. By signing the release, High Roller waived, settled and released all claims it had or might have against the Department.
Previous report
The Company estimates that the disruption from these stop sale orders had an unfavorable impact of $0.7 million on revenue during the six months ended June 30, 2024.
Previous report
Revenue totaled $14.8 million and $15.7 million for the three months ended June 30, 2025 and 2024, respectively. The decrease was primarily driven by the following:
Previous report
Phatebo contributed $9.7 million in the three months ended June 30, 2025 compared to $9.7 million in the three months ended June 30, 2024.
Previous report
JustCBD contributed $3.2 million in the three months ended June 30, 2025 compared to $4.4 million in the three months ended June 30, 2024.
Previous report
Vessel contributed $1.0 million in the three months ended June 30, 2025, compared to $1.4 million in the three months ended June 30, 2024.
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AV contributed $0.5 million in the three months ended June 30, 2025, compared to $0.2 million in the three months ended June 30, 2024.
Previous report
These decreases were partially offset by the acquisitions of TruHC and United, which contributed $0.2 million and $0.2 million, respectively, in the three months ended June 30, 2025, compared to $nil and $nil, respectively, in the three months ended June 30, 2024.
Showing the first 40 of 82 passages. Open the source sections for the rest.
Reworded paragraphs (41)
Previous wording
The Company's Commercial and Wholesale pillar encompasses the distribution of pharmaceutical products to international markets. This pillar is anchored by Flora's wholly owned subsidiary, Phatebo, a multi-national operator in pharmaceutical and medical cannabis distribution, with principal operations in Germany. Phatebo is a wholesale pharmaceutical distribution company with import and export capabilities of a wide range of pharmaceutical goods and medical cannabis products to treat a variety of health indications, including drugs related to cancer therapies, ADHD, multiple sclerosis and anti-depressants, among others. Phatebo holds a license for the Trade in Narcotic Drugs (including the cannabis sales license amendment) and a wholesale trading license, both of which are issued by BfArM (the largest drug approval authority in Europe). Phatebo is focused on distributing pharmaceutical products within 28 countries globally, primarily in Europe, but also with sales to Asia, Latin America, and North America. In November 2018, Phatebo also received a medical cannabis import and distribution license. We intend to leverage Phatebo's existing network of pharmacies as Flora begins to move medicinal cannabis from third parties into Germany. Additionally, the Phatebo warehouse provides a logistics outpost for Flora's growing product portfolio and distribution network within the European Union.
Current wording
The Company is a global pharmaceutical distributor through its wholly owned subsidiary Phatebo. Based in Germany, Phatebo is a wholesale pharmaceutical distribution company with import and export capabilities of a wide range of pharmaceutical goods and medical products to treat a variety of health indications, including drugs related to cancer therapies, ADHD, multiple sclerosis and anti-depressants, among others. Phatebo is focused on distributing pharmaceutical products within 28 countries globally, primarily in Europe, but also with sales to Asia, Latin America, and North America. Additionally, the Phatebo warehouse provides a logistics outpost for Flora's growing product portfolio and distribution network within the European Union. On September 20, 2025, we entered into an agreement for the disposition of certain components of our existing hemp and cannabis business, as described below under the header "Sale of Legacy Hemp and Cannabis Business."
Previous wording
On February 25, 2025, the Company was notified by the Nasdaq Stock Market, LLC ("Nasdaq") that it was not in compliance with the minimum bid price requirement of $1.00 per share for 30 consecutive business days as set forth in Rule 5550(a)(2) of the Nasdaq Listing Rules (the "Minimum Bid Price Requirement"). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has 180 calendar days, or until August 25, 2025, to regain compliance with the Minimum Bid Price Requirement. To regain compliance, the Company will need to maintain a minimum closing bid price of $1.00 or more for at least 10 consecutive trading days before August 25, 2025, unless Nasdaq Listing Qualifications Department exercises its discretion to extend this ten-day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H). If the common shares do not achieve compliance by August 25, 2025, the Company may be eligible for an additional 180-day period to regain compliance, provided that it meets the continued listing requirement for market value of publicly held shares and all other initial listing standards of the Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and provides written notice to Nasdaq of its intention to cure the deficiency during the second compliance period, for example, by effecting a reverse stock split, if necessary.
Current wording
On February 25, 2025, the Company was notified by the Nasdaq Stock Market, LLC ("Nasdaq") that it was not in compliance with the minimum bid price requirement of $1.00 per share for 30 consecutive business days as set forth in Rule 5550(a)(2) of the Nasdaq Listing Rules (the "Minimum Bid Price Requirement"). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has 180 calendar days, or until August 25, 2025, to regain compliance with the Minimum Bid Price Requirement. To regain compliance, the Company will need to maintain a minimum closing bid price of $1.00 or more for at least 10 consecutive trading days before August 25, 2025, unless Nasdaq Listing Qualifications Department exercises its discretion to extend this 10-day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H). If the common shares do not achieve compliance by August 25, 2025, the Company may be eligible for an additional 180-day period to regain compliance, provided that it meets the continued listing requirement for market value of publicly held shares and all other initial listing standards of the Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and provides written notice to Nasdaq of its intention to cure the deficiency during the second compliance period, for example, by effecting a reverse stock split, if necessary.
Previous wording
On July 31, 2025, the Company announced that it will effect a 1-for-39 share consolidation (the “Reverse Stock Split”) of the Company’s issued and outstanding common shares by the filing of Articles of Amendment to the Company's amended and restated Articles of Incorporation with the Ontario Ministry of Public and Business Service Delivery and Procurement. The Reverse Stock Split will become effective at 5:00 p.m. Eastern Time on August 3, 2025. The Company anticipates that the common shares will begin to trade on a post-Reverse Stock Split basis as of the opening of the Nasdaq Capital Market on August 4, 2025.
Current wording
On August 4, 2025, the Company filed an Articles of Amendment to the Company's amended and restated Articles of Incorporation with the Ontario Ministry of Public and Business Service Delivery and Procurement to effect a reverse stock split of the Company's common shares at a ratio of 1-for-39, which became effective at 5:00 p.m. Eastern Time on August 3, 2025 (the "Reverse Stock Split"). As a result of the Reverse Stock Split, every 39 common shares issued and outstanding were automatically reclassified into one new common share. No fractional shares were issued in connection with the Reverse Stock Split. Any fractional shares resulting from the Reverse Stock Split were automatically rounded up to the nearest whole common share. From August 4, 2025 through August 18, 2025, a period of 10 consecutive trading days, the closing bid price of the Company's common shares was greater than $1.00 per share. Accordingly, on August 19, 2025, the Company received formal notice from Nasdaq that it had regained compliance with the Minimum Bid Price Requirement and that the matter has been closed. Flora is now in compliance with all applicable continued listing standards and its common shares continue to be listed and traded on Nasdaq.
Previous wording
The Company operates its manufacturing and distribution business through its subsidiaries in the United States, Germany and Australia.
Current wording
The Company operates its global pharmaceutical distribution business through its subsidiary in the Germany.
Previous wording
Revenue is recognized at the transaction price, which is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods to a customer. Gross revenue excludes duties and taxes collected on behalf of third parties. Revenue is presented net of expected price discounts, sales returns, customer rebates and other incentives. The Company's cannabis consumption accessory products include a six-month warranty, for which the Company accrues the estimated liability based on historical and expected claim costs.
Current wording
Revenue is recognized at the transaction price, which is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods to a customer. Gross revenue excludes duties and taxes collected on behalf of third parties. Revenue is presented net of expected price discounts, sales returns, customer rebates and other incentives.
Previous wording
The Company includes the cost of raw materials and supplies, purchased finished goods and changes in inventory reserves in cost of sales for each of its two reportable segments. Raw materials include the purchase cost of the materials, freight-in and duty. Finished goods include the cost of direct materials and labor and a proportion of manufacturing overhead allocated based on normal production capacity. Inventory reserves for excess and obsolete inventory are based upon quantities on hand, projected volumes from demand forecasts and net realizable value. The primary factors that can impact cost of goods sold on a period-to-period basis include the volume of products sold, the mix of products sold, third-party quality costs, transportation, overhead allocations and changes in inventory provisions.
Current wording
The Company includes the cost of raw materials and supplies, purchased finished goods and changes in inventory reserves in cost of sale. Raw materials include the purchase cost of the materials, freight-in and duty. Finished goods include the cost of products purchased from suppliers. Inventory reserves for excess and obsolete inventory are based upon quantities on hand, projected volumes from demand forecasts and net realizable value. The primary factors that can impact cost of goods sold on a period-to-period basis include the volume of products sold, the mix of products sold, third-party quality costs, transportation, overhead allocations and changes in inventory provisions.
Previous wording
General and administrative include certain public company costs, merchant fees and temporary labor and subcontractor costs for the Company's operating subsidiaries.
Current wording
General and administrative include certain public company costs and temporary labor and subcontractor costs for the Company's operating subsidiaries.
Previous wording
Non-operating expenses include interest income and expenses, foreign exchange (gains) losses and unrealized losses and gains from changes in fair value. Interest is primarily related to the Company's lease liabilities and operating lines of credit. Foreign exchange is largely related to the revaluation of balances denominated in foreign currencies to U.S. dollars. Unrealized losses and gains from changes in fair value pertain to fluctuations in the fair values of the Company's digital assets, investments and liabilities.
Current wording
Non-operating expenses include interest income and expenses, foreign exchange (gains) losses and unrealized losses (gains) from changes in fair value. Interest is primarily related to the Company's lease liabilities and operating lines of credit. Foreign exchange is largely related to the revaluation of balances denominated in foreign currencies to U.S. dollars. Unrealized losses (gains) from changes in fair value pertain to fluctuations in the fair values of the Company's digital assets and liabilities.
Previous wording
The following tables provide sets forth the Company's consolidated results of operations for the three and six months ended June 30, 2025 and 2024 (in thousands). The period-to-period comparisons of the Company's historical results are not necessarily indicative of the results that may be expected in the future. The results of operations data have been derived from our unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2025 and 2024 included elsewhere in this Quarterly Report.
Current wording
The following tables provide sets forth the Company's consolidated results of operations for the three and nine months ended September 30, 2025 and 2024 (in thousands). The period-to-period comparisons of the Company's historical results are not necessarily indicative of the results that may be expected in the future. The results of operations data have been derived from our unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2025 and 2024 included elsewhere in this Quarterly Report.
Previous wording
Gross profit totaled $2.8 million and $3.2 million for the three months ended June 30, 2025 and 2024, respectively. The decrease was primarily driven by the decreased margins in the Commercial and Wholesale segment, where Phatebo contributed $0.6 million in the three months ended June 30, 2025 compared to $0.8 million in the three months ended June 30, 2024. JustCBD contributed $1.6 million in the three months ended June 30, 2025, compared to $1.5 million for the three months ended June 30, 2024. Vessel contributed $0.6 million in the three months ended June 30, 2025, compared to $0.8 million in the three months ended June 30, 2024. As a percentage of net sales, or gross margin, the Company reported 19% and 20% for the three months ended June 30, 2025 and 2024, respectively. The decrease is primarily due to unfavorable mix, with a higher percentage of sales at Phatebo which distributes relatively lower margin pharmaceuticals.
Current wording
Gross profit totaled $0.3 million and $0.5 million for the three months ended September 30, 2025 and 2024, respectively. The decrease was primarily driven by the decreased margins at the Phatebo subsidiary in the three months ended September 30, 2025. As a percentage of net sales, or gross margin, the Company reported 3% and 7% for the three months ended September 30, 2025 and 2024, respectively. The decrease is primarily due to unfavorable mix, with a higher percentage of lower margin sales at Phatebo.
Previous wording
Consulting and management fees were $2.2 million for the three months ended June 30, 2025 compared to $2.3 million for the three months ended June 30, 2024. These fees are related to employment and consulting contracts with most of the Company's management, as well as directors. The decrease is primarily due to a reduction in the Company's total headcount across all its business units.
Current wording
Consulting and management fees were $1.2 million for the three months ended September 30, 2025 compared to $1.1 million for the three months ended September 30, 2024. These fees are related to employment and consulting contracts with most of the Company's management, as well as directors.
Previous wording
Professional fees totaled $0.7 million for the three months ended June 30, 2025 compared to $1.1 million for the three months ended June 30, 2024. These expenses are associated with legal, accounting and audit services. The decrease is primarily due to costs incurred in 2024 related to the acquisitions of TruHC and AV.
Current wording
Professional fees totaled $0.4 million for the three months ended September 30, 2025 compared to $0.5 million for the three months ended September 30, 2024. These expenses are associated with legal, accounting and audit services.
Previous wording
General and administrative expenses totaled $0.8 million for the three months ended June 30, 2025 compared to $0.6 million for the three months ended June 30, 2024. The primary expenses included in both periods were filing services and shareholder communications, as well as professional dues and subscriptions.
Current wording
General and administrative expenses totaled $0.5 million for the three months ended September 30, 2025 compared to $0.4 million for the three months ended September 30, 2024. The primary expenses included in both periods were filing services and shareholder communications, as well as professional dues and subscriptions.
Previous wording
Travel expenses totaled $0.2 million for both the six months ended June 30, 2025 and the six months ended June 30, 2024. These expenses were for various trips related to the subsidiaries and the Company's promotional activities.
Current wording
Travel expenses were less than $0.1 million for the three months ended September 30, 2025 compared to $0.1 million for the three months ended September 30, 2024. These expenses were for various trips related to the subsidiaries and the Company's promotional activities.
Previous wording
Share based compensation expenses totaled $0.2 million for the three months ended June 30, 2025 compared to less than $0.1 million for the three months ended June 30, 2024. These expenses represent the amortization of the fair value of share-based payments. The increase is due to the grants of SARs to key employees during the year ended December 31, 2024.
Current wording
Share-based compensation expenses totaled $0.5 million for the three months ended September 30, 2025 compared to $0.4 million for the three months ended September 30, 2024. These expenses represent the amortization of the fair value of share-based payments. The increase is due to the grants of SARs to key employees during the year ended December 31, 2024.
Previous wording
Operating lease expenses totaled $0.2 million for both the three months ended June 30, 2025 and the three months ended June 30, 2024.
Current wording
Operating lease expenses totaled less than $0.1 million for both the three months ended September 30, 2025 and the three months ended September 30, 2024.
Previous wording
Bad debt expense totaled $0.3 million for the three months ended June 30, 2025 compared to $0.2 million for the three months ended June 30, 2024. The amounts reflect the Company's estimate of lifetime expected losses related to outstanding trade receivables.
Current wording
Bad debt expense totaled less than $0.1 million for the three months ended September 30, 2025 compared to $nil for the three months ended September 30, 2024. The amounts reflect the Company's estimate of lifetime expected losses related to outstanding trade receivables.
Previous wording
Other income totaled $0.2 million for the three months ended June 30, 2025 compared to other expense of $0.5 million for the three months ended June 30, 2024. For both periods, this income and expense consists mainly of insurance, repairs and maintenance and royalties partially offset by miscellaneous incomes. The decrease in expense in the three months ended June 30, 2025 was driven by reduced royalty fees, as well as a gain recorded on a supplier agreement at TruHC.
Current wording
Other expenses totaled $0.8 million for the three months ended September 30, 2025 compared to other expense of $0.1 million for the three months ended September 30, 2024. For both periods, this income and expense consists mainly of insurance, repairs and maintenance and royalties partially offset by miscellaneous incomes. The increase in expense in the three months ended September 30, 2025 was driven by a $0.6 million contingency loss recorded for a legal proceeding brought against Vessel Brand Inc, a former subsidiary of the Company, and the Company on June 2, 2025.
Previous wording
We recognized less than $0.1 million in income tax benefit and $0.1 million in income tax expense for the six months ended June 30, 2025 and 2024, respectively. Our effective tax rate during the periods ended June 30, 2025 and 2024 was 0.3% and -1.6%, respectively. We maintain valuation allowances when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. In determining whether a valuation allowance is required, we consider such factors as prior earnings history, expected future earnings, carry-back and carry-forward periods, and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. We continue to believe our deferred tax assets are not more-likely-than-not to be realized and a full valuation allowance remains recorded against net deferred taxes as of June 30, 2025 and 2024.
Current wording
We recognized less than $0.1 million in income tax expense for the three months ended September 30, 2025 compared to $0.1 million in income tax benefit for the three months ended September 30, 2024. Our effective tax rate during the periods ended September 30, 2025 and 2024 was -0.5% and 2.8%, respectively. We maintain valuation allowances when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. In determining whether a valuation allowance is required, we consider such factors as prior earnings history, expected future earnings, carry-back and carry-forward periods and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. We continue to believe our deferred tax assets are not more-likely-than-not to be realized and a full valuation allowance remains recorded against net deferred taxes as of September 30, 2025 and 2024.
Previous wording
We recorded a net loss of $2.4 million for the three months ended June 30, 2025 compared to a net loss of $2.7 million for the three months ended June 30, 2024. This decrease in net loss is driven by lower operating expenses partially offset by lower gross profit and non-operating income.
Current wording
The Company recorded a net loss of $6.7 million for the three months ended September 30, 2025 compared to a net loss of $3.8 million for the three months ended September 30, 2024. This increase in net loss is driven by increased loss from discontinued operations and higher operating expenses.
Previous wording
Operating expenses totaled $9.3 million and $13.0 million for the six months ended June 30, 2025 and 2024, respectively. The decrease is driven by a $1.2 million gain on the disposal and deconsolidation of insolvent subsidiaries, as well as lower headcount-related costs and asset impairments.
Current wording
Operating expenses totaled $6.9 million and $7.1 million for the nine months ended September 30, 2025 and 2024, respectively. The decrease is driven by a $1.2 million gain on the disposal and deconsolidation of insolvent subsidiaries.
Previous wording
Consulting and management fees were $4.1 million for the six months ended June 30, 2025 compared to $4.7 million for the six months ended June 30, 2024. These fees are related to employment and consulting contracts with most of the Company's management, as well as directors. The decrease is primarily due to a reduction in the Company's total headcount across all its business units.
Current wording
Consulting and management fees were $2.8 million for both the nine months ended September 30, 2025 and the nine months ended September 30, 2024. These fees are related to employment and consulting contracts with most of the Company's management, as well as directors.
Previous wording
Professional fees totaled $1.3 million for the six months ended June 30, 2025 compared to $1.6 million for the six months ended June 30, 2024. These expenses are associated with legal, accounting and audit services.
Current wording
Professional fees totaled $1.6 million for the nine months ended September 30, 2025 compared to $2.0 million for the nine months ended September 30, 2024. These expenses are associated with legal, accounting and audit services.
Previous wording
General and administrative expenses totaled $1.2 million for the six months ended June 30, 2025 compared to $1.0 million for the six months ended June 30, 2024. The primary expenses included in both periods were filing services and shareholder communications, as well as professional dues and subscriptions.
Current wording
General and administrative expenses totaled $1.1 million for the nine months ended September 30, 2025 compared to $0.8 million for the nine months ended September 30, 2024. The primary expenses included in both periods were filing services and shareholder communications, as well as professional dues and subscriptions.
Previous wording
Travel expenses totaled $0.1 million for both the three months ended June 30, 2025 and the three months ended June 30, 2024. These expenses were for various trips related to the subsidiaries and the Company's promotional activities.
Current wording
Travel expenses totaled $0.1 million for both the nine months ended September 30, 2025 and the nine months ended September 30, 2024. These expenses were for various trips related to the subsidiaries and the Company's promotional activities.
Previous wording
Share based compensation expenses totaled $0.3 million for the six months ended June 30, 2025 compared to less than $0.1 million for the six months ended June 30, 2024. These expenses represent the amortization of the fair value of share-based payments. The increase is due to the grants of SARs to key employees during the year ended December 31, 2024.
Current wording
Share-based compensation expenses totaled $0.9 million for the nine months ended September 30, 2025 compared to $0.4 million for the nine months ended September 30, 2024. These expenses represent the amortization of the fair value of share-based payments. The increase is due to the grants of SARs to key employees during the year ended December 31, 2024.
Previous wording
Asset impairment totaled less than $0.1 million for the six months ended June 30, 2025 compared to $1.1 million for the six months ended June 30, 2024. The amount in 2025 represents impairment of an operating lease right of use asset in Florida. The amount in 2024 represents impairment of the long-lived assets at Vessel and JustCBD.
Current wording
Asset impairment totaled less than $0.1 million for both the nine months ended September 30, 2025 and the nine months ended September 30, 2024. The amount in 2025 represents impairment of an operating lease right of use asset in Florida. The amount in 2024 represents impairment of the long-lived assets in Germany.
Previous wording
Gain on disposal of insolvent subsidiaries totaled $1.2 million for the six months ended June 30, 2025 compared to $nil for the six months ended June 30, 2024. The gain was the result of certain subsidiaries of the Company filing for bankruptcy during March 2025. The Company deconsolidated these subsidiaries when it lost control upon each subsidiaries' filing for bankruptcy.
Current wording
Gain on disposal of insolvent subsidiaries totaled $1.1 million for the nine months ended September 30, 2025 compared to $nil for the nine months ended September 30, 2024. The gain was the result of certain subsidiaries of the Company filing for bankruptcy during March 2025. The Company deconsolidated these subsidiaries when it lost control upon each subsidiary's filing for bankruptcy.
Previous wording
Other expense totaled $0.1 million for the six months ended June 30, 2025 compared to $1.2 million for the six months ended June 30, 2024. For both periods, this income and expense consists mainly of insurance, repairs and maintenance and royalties partially offset by miscellaneous incomes. The decrease in expense in the six months ended June 30, 2025 was driven by reduced royalty fees, as well as a gain recorded on a supplier agreement at TruHC.
Current wording
Other expense totaled $1.4 million for the nine months ended September 30, 2025 compared to $0.8 million for the nine months ended September 30, 2024. For both periods, this expense consists mainly of insurance, repairs and maintenance and royalties partially offset by miscellaneous incomes. The increase in expense in the nine months ended September 30, 2025 was driven by a $0.6 million contingency loss recorded for a legal proceeding brought against Vessel Brand Inc, a former subsidiary of the Company, and the Company on June 2, 2025.
Previous wording
We realized $0.1 million in non-operating income for the three months ended June 30, 2025 compared to non-operating income of $0.8 million for the three months ended June 30, 2024. This income and expense consist of unrealized (gains) losses from changes in fair value, interest (income) expense and foreign exchange loss (gain). The increase in income is primarily due to a less than $0.1 million gain on the value of the contingent consideration related to the JustCBD and Original Hemp acquisitions during the three months ended June 30, 2025 compared to a $0.8 million gain during the three months ended June 30, 2024.
Current wording
We realized less than $0.1 million in non-operating income for the nine months ended September 30, 2025 compared to non-operating loss of $0.2 million for the nine months ended September 30, 2024. This income and expense consist of unrealized (gains) losses from changes in fair value, interest (income) expense and foreign exchange loss (gain). The increase in income is primarily due to a $1.3 million gain on the revaluation of the Company's digital assets partially offset by $1.1 million in loss related to the settlement of the JustCBD contingent consideration recorded during the nine months ended September 30, 2025.
Previous wording
We recognized less than $0.1 million in income tax benefit for both the three months ended June 30, 2025 and the three months ended June 30, 2024. Our effective tax rate during the periods ended June 30, 2025 and 2024 was 2.0% and 1.3%, respectively. We maintain valuation allowances when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. In determining whether a valuation allowance is required, we consider such factors as prior earnings history, expected future earnings, carry-back and carry-forward periods, and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. We continue to believe our deferred tax assets are not more-likely-than-not to be realized and a full valuation allowance remains recorded against net deferred taxes as of June 30, 2025 and 2024.
Current wording
We recognized $0.1 million in income tax expense for both the nine months ended September 30, 2025 and the nine months ended September 30, 2024. Our effective tax rate during the periods ended September 30, 2025 and 2024 was -2.1% and -1.5%, respectively. We maintain valuation allowances when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. In determining whether a valuation allowance is required, we consider such factors as prior earnings history, expected future earnings, carry-back and carry-forward periods, and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. We continue to believe our deferred tax assets are not more-likely-than-not to be realized and a full valuation allowance remains recorded against net deferred taxes as of September 30, 2025 and 2024.
Previous wording
Since the Company's inception, we have funded our operations and capital spending through cash flows from product sales and proceeds from the sale of our capital stock. The Company is generating cash from sales and is deploying its capital reserves to acquire and develop assets capable of producing additional revenues and earnings over both the immediate and near term to support our business growth and expansion. We have generated significant operating losses and negative cash flows from operations as reflected in our accumulated deficit and unaudited condensed interim consolidated statements of cash flows. We expect to continue to incur operating losses and negative cash flows in the foreseeable future. Our current principal sources of liquidity are cash and cash equivalents provided by our operations and prior equity offerings. Cash consists primarily of cash on deposit with banks. Cash was $1.5 million and $6.1 million as of June 30, 2025, and December 31, 2024, respectively. As of June 30, 2025, the Company's current working capital, anticipated operating expenses and net losses, and the uncertainties surrounding its ability to raise additional capital as needed, raise substantial doubt as to whether existing cash and cash equivalents will be sufficient to meet its obligations as they come due within twelve months from the date the unaudited condensed interim consolidated financial statements were issued. The unaudited condensed interim consolidated financial statements do not include any adjustments for the recovery and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Current wording
Since the Company's inception, we have funded our operations and capital spending through cash flows from product sales and proceeds from the sale of our capital stock. The Company is generating cash from sales and is deploying its capital reserves to acquire and develop assets capable of producing additional revenues and earnings over both the immediate and near term to support our business growth and expansion. While we have generated significant operating losses and negative cash flows from operations as reflected in our accumulated deficit and unaudited condensed interim consolidated statements of cash flows mainly through our legacy hemp and cannabis businesses, we began implementing an expansion strategy focused on identifying and pursuing complementary growth opportunities within the global digital asset market in early 2025. This has resulted in $55.4 million in restricted and unrestricted digital assets on the Company's condensed consolidated balance sheet as of September 30, 2025. Our current principal sources of liquidity are cash and cash equivalents provided by our operations and prior equity offerings. Cash consists primarily of cash on deposit with banks. Cash was $13.1 million and $5.2 million as of September 30, 2025, and December 31, 2024, respectively. As a result of the PIPE Offering that closed on September 26, 2025, the Company believes that its existing sources of liquidity are and will be sufficient in both the short and long term to meet our working capital requirements and future obligations.
Previous wording
The Company's primary uses of cash are for working capital requirements and capital expenditures. Additionally, from time to time, it may use capital for acquisitions and other investing and financing activities. Working capital is used principally for the Company's personnel as well as costs related to the manufacture and production of its products. The Company's capital expenditures consist primarily of additional facilities, improvements in existing facilities and product development.
Current wording
The Company's primary uses of cash are for working capital requirements and capital expenditures. Additionally, from time to time, it may use capital for acquisitions and other investing and financing activities. Working capital is used principally for the Company's personnel as well as costs related to the distribution of pharmaceutical products. The Company's capital expenditures consist primarily of additional facilities, improvements in existing facilities and product development.
Previous wording
Net cash used in operating activities in the six months ended June 30, 2025 was $5.6 million compared to net cash used in operating activities of $1.6 million for the six months ended June 30, 2024. Cash flows used in operating activities for the periods ended June 30, 2025 and 2024 were due primarily to operating expenses exceeding the gross profit for the periods.
Current wording
Net cash used in operating activities in the nine months ended September 30, 2025 was $5.5 million compared to net cash used in operating activities of $3.7 million for the nine months ended September 30, 2024. Cash flows used in operating activities for the periods ended September 30, 2025 and 2024 were due primarily to operating expenses exceeding the gross profit for the periods.
Previous wording
Net cash provided by financing activities for the six months ended June 30, 2025 totaled $1.5 million compared to $3.4 million for the six months ended June 30, 2024. Cash flows provided from financing activities for the period ending June 30, 2025 were due to the sale of common shares of the Company in May 2025 as well as net borrowings on the credit facilities in Germany through the Company's Phatebo subsidiary. Cash flows provided from financing activities for the period ending June 30, 2024 were due to the sale of common shares of the Company in April 2024 as well as net borrowings on the credit facilities in Germany through the Company's Phatebo subsidiary.
Current wording
Net cash provided by financing activities for the nine months ended September 30, 2025 totaled $12.1 million compared to $3.1 million for the nine months ended September 30, 2024. Cash flows provided from financing activities for the period ending September 30, 2025 were due to the sale of common shares of the Company in May 2025 and September 2025 as well as net borrowings on the credit facilities in Germany through the Company's Phatebo subsidiary. Cash flows provided from financing activities for the period ending September 30, 2024 were due to the sale of common shares of the Company in April 2024 as well as net borrowings on the credit facilities in Germany through the Company's Phatebo subsidiary.
Previous wording
Net cash used in investing activities for the six months ended June 30, 2025 totaled $0.6 million compared to net cash used in investing activities during the six months ended June 30, 2024 of less than $0.1 million. Cash flows used in investing activities for the period ended June 30, 2025 were primarily related to the acquisition of digital assets. Cash flows used in investing activities for the period ended June 30, 2024 were primarily related to the purchases of property, plant and equipment.
Current wording
Net cash provided by investing activities for the nine months ended September 30, 2025 totaled $0.6 million compared to $0.2 million for the nine months ended September 30, 2024. Cash flows provided by investing activities for the period ended September 30, 2025 were primarily related to the acquisition and sale of digital assets. Cash flows provided by investing activities for the period ended September 30, 2024 were primarily proceeds from the sale of property, plant and equipment.
Previous wording
As of June 30, 2025, we had working capital of ($0.6) million, including $1.5 million of cash. The Company's primary cash flow needs are for the development of its operating activities, administrative expenses and for general working capital to support growing sales with related receivables and payables.
Current wording
As of September 30, 2025, we had working capital of $9.4 million, including $13.1 million of cash. The Company's primary cash flow needs are for the development of its operating activities, administrative expenses and for general working capital to support growing sales with related receivables and payables.
Previous wording
Our continued existence is dependent on our ability to generate positive cash flows through synergies within our operations, expanding our production capacity and geographic footprint, exploring strategic partnerships, and pursuing accretive acquisitions to supplement our organic growth. We are committed to attaining a level of sustained growth that will effectively offset our overhead costs, thereby paving the path to achieving profitability. We will be required in the future to raise additional capital through either equity or debt financings. To date, we have raised capital through multiple equity offerings. On May 2, 2025, the Company closed a private placement offering of 3,133,011 common shares of the Company at a price of $0.30 per common share and 726,992 pre-funded warrants at a price of $0.2999 per warrant for gross proceeds of $1.2 million, of which the Company immediately invested $1.0 million in digital assets. On December 16, 2024, the Company closed a registered direct offering of 2,850,000 units of the Company at a price of $1.25 per unit for gross proceeds of $3.6 million. On December 10, 2024 and December 11, 2024, the Company sold an aggregate of 425,000 of the Company's common shares at a price of $1.67 per common share for gross proceeds of $0.7 million pursuant to separate subscription agreements entered into between the Company and certain institutional investors. On April 8, 2024, the Company closed a registered direct offering of 1,700,000 common shares of the Company at a price of $1.90 per common share for gross proceeds of $3.2 million. There were no other equity offerings in the periods ended June 30, 2025 and June 30, 2024.
Current wording
On May 2, 2025, the Company closed a private placement offering of 80,340 common shares of the Company at a price of $11.70 per common share and 18,642 pre-funded warrants at a price of $11.6961 per warrant for gross proceeds of $1.2 million, of which the Company immediately invested $1.0 million in digital assets. On December 16, 2024, the Company closed a registered direct offering of 73,077 units of the Company at a price of $48.75 per unit for gross proceeds of $3.6 million. On December 10, 2024 and December 11, 2024, the Company sold an aggregate of 10,899 of the Company's common shares at a price of $65.13 per common share for gross proceeds of $0.7 million pursuant to separate subscription agreements entered into between the Company and certain institutional investors. On April 8, 2024, the Company closed a registered direct offering of 43,590 common shares of the Company at a price of $74.10 per common share for gross proceeds of $3.2 million. There were no other equity offerings in the periods ended September 30, 2025 and September 30, 2024.
Previous wording
In addition to the equity offerings described above, the Company also has access to credit facilities through its Phatebo subsidiary. The credit facilities total*€2.4 million with three different German banks and are secured by default guarantees. On June 30, 2025, the outstanding amount was€2.3* million ($2.7 million USD) and was due within the next twelve months. The credit facilities have interest rates ranging from 4.76% to 5.19% per year and does not have a set maturity date. The interest rate is reset every time a new amount is drawn.
Current wording
In addition to the equity offerings described above, the Company also has access to credit facilities through its Phatebo subsidiary. The credit facilities total*€2.4 million with three different German banks and are secured by default guarantees. On September 30, 2025, the outstanding amount was€2.3* million ($2.7 million USD) and was due within the next 12 months. The credit facilities have interest rates ranging from 4.76% to 5.08% per year and does not have a set maturity date. The interest rate is reset every time a new amount is drawn.
Previous wording
Except as discussed below, there were no new accounting standards issued during the six months ended June 30, 2025 that impacted the Company. See Note 3, Significant Accounting Policies, of the notes to the consolidated financial statements for the year ended December 31, 2024 for a discussion of recently issued accounting standards.
Current wording
Except as discussed below, there were no new accounting standards issued during the nine months ended September 30, 2025 that impacted the Company. See Note 3, Significant Accounting Policies, of the notes to the consolidated financial statements for the year ended December 31, 2024 for a discussion of recently issued accounting standards.
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Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Flora realized $0.3 million in non-operating loss for both the three months ended September 30, 2025 and the three months ended September 30, 2024. This loss consists of unrealized losses from changes in fair value, interest (income) expense and foreign exchange loss (gain).
Current report — wording carried from elsewhere
Gross profit totaled $1.5 million and $1.9 million for the nine months ended September 30, 2025 and 2024, respectively. The decrease was primarily driven by the decreased margins at the Phatebo subsidiary in the nine months ended September 30, 2025. As a percentage of net sales, or gross margin, the Company reported 6% and 7% for the nine months ended September 30, 2025 and 2024, respectively. The decrease is primarily due to unfavorable mix, with a higher percentage of lower margin sales at Phatebo.
Current report — wording carried from elsewhere
Our continued existence is dependent on our ability to generate positive cash flows through synergies within our operations, expanding our production capacity and geographic footprint, exploring strategic partnerships and pursuing accretive acquisitions to supplement our organic growth. We are committed to attaining a level of sustained growth that will effectively offset our overhead costs, thereby paving the path to achieving profitability. We will be required in the future to raise additional capital through either equity or debt financings. To date, we have raised capital through multiple equity offerings.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Bad debt expense totaled $0.3 million for the six months ended June 30, 2025 compared to $0.2 million for the six months ended June 30, 2024. The amounts reflect the Company's estimate of lifetime expected losses related to outstanding trade receivables.