TORONTO and GLIL YAM, Israel –IM Cannabis Corp. closed a US$225,000 convertible note financing in a private placement with an institutional investor.
The company intends to use the net proceeds for general corporate purposes.
The Company issued the Lender a note in the principal amount of US$225,000 with an original issuance discount of 10%. The note bears interest at a rate of 8% per annum, increasing to 14% upon the occurrence and continuation of an event of default. The note is not repayable in cash; the company’s obligations will be satisfied solely through the issuance of common shares in the capital of the company upon conversion.
The conversion price is set to the lower of (i) a fixed price of US$3.328 per common share or (ii) 90% of the lowest daily volume-weighted average price during the 20 consecutive trading days preceding the conversion date, subject to a floor price of US$0.665692. The note includes customary limitations, including a 4.99% beneficial ownership cap.
In connection with the note, the company issued a warrant to purchase up to 77,855 common shares at an exercise price of C$4.63 per common share. The warrants became immediately exercisable upon their issuance date, September 2, 2026, and will expire after five years, on September 2, 2031.
The company has agreed to reserve sufficient common shares for issuance upon conversion of the September note and exercise of the warrants and to file a resale registration statement on Form F-3 with the U.S. Securities and Exchange Commission and to use commercially reasonable efforts to secure its effectiveness within the timeframes agreed with the lender.
All securities issued under the financing described above are subject to: (i) a four month and one day hold period from the date of issuance and (ii) applicable legends as required pursuant to the U.S. Securities Act of 1933, as amended. The private placement of the securities offered was made in reliance on an exemption from (x) registration under Section 4(a)(2) of the Securities Act and (y) applicable Canadian securities laws. Accordingly, the securities issued in the private placement may not be offered or sold in the United States or Canada except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws or an exemption pursuant to Canadian securities laws.
