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IM Cannabis Corp. Provides Significant Corporate Updates

IM Cannabis Corp. (CSE: IMCC, NASDAQ: IMCC), a prominent player in the medical cannabis sector, recently disclosed several key corporate developments that could reshape its future in the competitive cannabis market. The company is operational in Israel and Germany, two of the largest medical cannabis markets globally.

Nasdaq Notification Letter

On April 9, 2025, IM Cannabis received a notification from the Nasdaq Stock Market indicating its non-compliance with the Nasdaq Listing Rule 5550(b)(1). This rule mandates that listed companies maintain a minimum stockholders' equity of $2.5 million. In its latest Form 20-F for the year ending December 31, 2024, IM Cannabis reported a stockholders' equity of approximately $2.18 million. Additionally, Nasdaq determined that the company does not meet alternate compliance requirements related to market value of listed securities or net income from ongoing operations.

Although this notification does not immediately affect IM Cannabis's listing status on the Nasdaq, it requires the company to submit a compliance plan within 45 days to regain its standing. This strategic maneuver is critical as the company aims to demonstrate its commitment to fulfilling requirements for continued listing.

Plans for Regaining Compliance

IM Cannabis is actively evaluating various approaches to regain compliance and is set to submit its plan soon. While the notification has raised concerns, it has not ceased the company's operations, and regular trading of its shares on the Nasdaq Capital Market will continue as long as it meets other listing criteria.

Acquisition of Focus Medical Herbs Ltd.

A significant aspect of IM Cannabis's recent plans includes the acquisition of the remaining 26% interest in Focus Medical Herbs Ltd., extending its stake to 100%. Initially, IM Cannabis had acquired a 74% stake in Focus through its subsidiary I.M.C. Holdings Ltd. The planned purchase of the additional interest from Ewave Group Ltd., a related entity, is set at a designated purchase price determined by an independent third-party valuation.

To offset cash flow concerns, IM Cannabis has resolved to satisfy this purchase through the issuance of common shares rather than cash. This decision is intended to preserve the company’s liquidity while expanding its holdings in the domestic cannabis market.

The completion of this acquisition will also be subject to shareholder approval during the upcoming annual general and special meeting scheduled for May 23, 2025.

Background on Focus Medical Herbs Ltd.

Focus Medical Herbs Ltd., based in Israel, was founded in 2010, primarily engaging in the cultivation and production of medical cannabis under a license from the Israeli Medical Cannabis Agency (IMCA). However, operations were altered in June 2022 to focus solely on importation activities. The company has endured various financial restructurings and ownership transformations over the years, now culminating in this potential acquisition.

The purchase and integration of Focus into IM Cannabis's operations are seen as a strategic move to solidify its presence in the Israeli market, further enhancing the company's ability to deliver medical cannabis products efficiently.

Future Outlook for IM Cannabis Corp.

Despite the challenges posed by Nasdaq's notification and the complexities of acquiring Focus, IM Cannabis remains steadfast in its growth ambitions. The company adheres to the regulatory frameworks and aims to leverage its unique data-driven approach within the cannabis sector.

As the global cannabis landscape continues to evolve, IM Cannabis is poised to strengthen its operational infrastructure and market presence, ensuring that it remains a key player in the medical cannabis industry.

IM Cannabis Corp.’s journey reflects both the challenges and opportunities in an increasingly regulated market, highlighting its commitment to responsible growth and compliance amid changing industry dynamics.