IM Cannabis Secures Over $2 Million in Financing for Growth and Stability

In a recent announcement from Toronto and Glil Yam, Israel, IM Cannabis Corp. (Nasdaq: IMCC), a prominent player in the medical cannabis sector, revealed a successful financing effort that raised $2,171,660.40 through note purchase agreements with a third-party lender. This cash infusion is aimed at bolstering the company's liquidity and addressing existing financial obligations.

Financing Overview

The structured financing consists of two promissory notes issued in January 2026. The First Note, dated January 7, has a principal of $1,538,749, impacted by an original issuance discount of 10%. It incurs an interest rate of 8% per annum, escalating to 14% upon defaults. Set to mature in 18 months, it permits the lender to extend the term if necessary. Post-maturity, IM Cannabis is obligated to settle the principal and accrued interest in ten equal monthly installments commenced after the 18-month period. Notably, prepayment is permitted but requires lender consent, and the loan is structured as non-recourse, focusing on the conversion or exercise of warrants secured through the loan.

Conversion Features

An essential feature of the First Note is its conversion option, allowing the lender to convert the note into common shares of IM Cannabis. The conversion price will be determined as the lower of $1.47 per share or 90% of the lowest daily volume-weighted average price in the preceding 20 trading days, ensuring a minimum floor price of $0.29 per share. The issuance included 228,150 purchase warrants, entitling the lender to procure shares at C$3.45 each, valid for five years.

Approximately $500,000 of the raised capital was allocated to repay certain existing creditors, which contributed to reducing outstanding liabilities and enhanced the company's overall financial flexibility. The remaining funds are earmarked for various corporate purposes including working capital and strategic initiatives.

Second Note Financing

Also part of the financing landscape is the Second Note, established through another agreement dated January 20. It carries a principal of $632,911.50, similarly bearing an 8% interest rate with an escalation clause for defaults. Like the First Note, it has an 18-month maturity with conditions for monthly repayments post-maturity. This note also includes conversion features with a fixed price of $1.38 per share or 90% of the lowest daily volume-weighted average price, subject to a floor of $0.275. With this note, the lender received 93,671 purchase warrants under the same conditions as the first.

Future Outlook and Compliance

The company anticipates that the proceeds will provide significant support as it maneuvers through the complexities of the medical cannabis marketplace, particularly in Israel and Germany, where it aims to solidify its market position. IM Cannabis Corp. has committed to filing a registration statement with the U.S. Securities and Exchange Commission within 30 trading days following the agreements, facilitating the resale of shares upon conversion of both notes.

With this proactive financial strategy, IM Cannabis is set to enhance its liquidity, stabilize its financial standing, and potentially grow its presence in the burgeoning medical cannabis industry. In a sector marked by evolving regulations and competition, timely access to capital is crucial to navigate challenges and capitalize on opportunities in both domestic and international markets.

Conclusion

IM Cannabis Corp.'s strategic move to secure financing emphasizes its commitment to achieving sustainable growth while balancing financial obligations. As the company navigates this next phase, stakeholders will be keenly watching how these financial maneuvers translate into real-world operational success.