Vancouver – November 04, 2026 -- IM Cannabis Corp. (Nasdaq: IMCC) has closed a US$1,200,000 convertible note financing with an existing institutional investor, issuing the note at an original issuance discount of 15% under a purchase agreement dated November 4, 2026.
Note carries 4% interest and a 28-month maturity
The note bears interest of 4% per annum, rising to 14% if an event of default occurs and continues. It matures 28 months after issuance and is repayable in 10 equal monthly instalments starting after the 18th month. The investor may convert all or part of the outstanding balance into common shares on one or more occasions.
Conversion price floats down to a US$0.1449 floor
The conversion price is the lower of a fixed US$0.610 per share or 85% of the lowest daily volume-weighted average price over the 20 consecutive trading days before conversion. A floor of US$0.1449 per share applies. A 4.99% beneficial ownership cap limits the investor's stake.
Warrants cover 3,936,330 shares through November 2029
IMCC also issued the investor warrants to buy up to 3,936,330 common shares at US$0.610 each. The warrants were immediately exercisable on November 4, 2026, and expire on November 3, 2029. They include anti-dilution and ratchet adjustment provisions.
Further US$1.2M tranches possible from January 2027
From January 1, 2027, IMCC may ask the investor to purchase additional convertible notes of up to US$1,200,000 in each three-month period. Each would carry accompanying warrants on substantially the same terms. The company plans to use the net proceeds for general corporate purposes.
Company must file Form F-3 resale registration with the SEC
IMCC agreed to reserve enough common shares to cover note conversions and warrant exercises. It must also file a resale registration statement on Form F-3 with the U.S. Securities and Exchange Commission and use commercially reasonable efforts to secure its effectiveness within timeframes agreed with the investor.
All securities issued carry a four-month-and-one-day hold period under Canadian securities law and U.S. Securities Act legends. The placement relied on exemptions under Section 4(a)(2) of the Securities Act and Canadian securities laws, so the securities cannot be sold in the United States or Canada without an effective registration statement or an applicable exemption.
The company's risk disclosures cite the risk of defaulting on existing debt, its ability to keep meeting Nasdaq Capital Market listing requirements, and the impact of the multi-front war Israel is facing on its operations.