IM Cannabis Secures Over $2 Million in Debt Financing
TORONTO and GLIL YAM, Israel — IM Cannabis Corp. ("IMC" or the "Company") (NASDAQ: IMCC), a renowned medical cannabis company operating in Israel and Germany, recently disclosed that it successfully raised a total of $2,171,660.40 through a series of note purchase agreements with an arm's length third party, referred to as the "Lender". This financial maneuver aims to bolster the Company's liquidity to manage current business needs effectively.
Details of the First Note Purchase Agreement
In accordance with the first agreement established between the Company and Lender dated January 7, 2026, the Company issued a note with a principal amount of $1,538,749, reflecting a 10% original issuance discount. The interest rate for this note is set at 8% annually, escalating to 14% in the event of an ongoing default. This note has a maturity period of 18 months, with an option for the Lender to extend if necessary.
When the maturity period concludes, the Company will be mandated to repay the outstanding principal along with accrued interest through ten monthly instalments. These will be due on the first of each month following the 18-month mark of the issuance. Additionally, IMC holds the right to prepay the note at any point, subject to terms stipulated in the agreement.
This first note is convertible into common shares of the Company, termed "Common Shares", at a conversion price that is the lesser of either a fixed price of $1.47 or 90% of the lowest average volume-weighted price ("VWAP") from the preceding 20 trading days. However, this conversion price shall not fall below a floor price of $0.29 per Common Share.
To incentivize the Lender further, IMC issued 228,150 purchase warrants, also known as "First Note Warrants", allowing the purchase of Common Shares at a price of C$3.45 for five years.
Second Note Purchase Agreement Insights
The second note purchase agreement commenced on January 20, 2026, in which the Company issued a note with a principal of $632,911.50 after a 10% discount. Similar to the first, this note carries an 8% interest rate, escalating to 14% in the event of default and matures in 18 months.
Post-maturity, the repayment conditions are like its predecessor, requiring structured monthly payments starting after the 18-month period. As with the first note, prepayment options are available upon fulfilling specific terms. The conversion into common shares follows the same parameters, with the second note also being convertible at the lesser of a fixed price of $1.38 or 90% of the lowest VWAP during the 20 prior trading days.
This second agreement further grants the Lender 93,671 purchase warrants, or "Second Note Warrants", granting rights to purchase shares at a price of C$3.45 over five years.
Proceeds Utilization and Corporate Strategy
A significant portion, approximately $500,000, of the raised funds is earmarked for repaying existing creditors, thus enhancing the Company's financial flexibility. The remaining funds will be allocated to general corporate purposes, working capital, and strategic operational initiatives to foster growth.
With regards to compliance, IMC is set to file a registration statement on Form F-3 with the U.S. Securities and Exchange Commission ("SEC") to facilitate the resale of Common Shares developed from these notes. This filing must occur within 30 trading days from the agreement's date, and the Company commits to making reasonable efforts to ensure its prompt effectiveness.
About IM Cannabis Corp.
IMC (NASDAQ: IMCC) specializes in providing high-quality cannabis products to medical patients in both Israel and Germany. The Company's strategic focus lies in sustainable growth within its most valuable markets, underpinned by a unique data-driven framework and an internationally sourced supply chain. IMC is dedicated to responsible practices and adheres strictly to regulatory standards, aspiring to amplify its marketplace strength and establish a distinguished global presence within the cannabis sector.
Operating in Israel through its subsidiaries, IMC imports cannabis for medical patients, utilizing years of proprietary data and patient feedback to refine its offerings. Furthermore, the Company manages retail pharmacies and online services to assure safe product distribution and maintain quality control throughout its entire supply chain in Israel and Germany.
Frequently Asked Questions
What amount did IM Cannabis raise in their financing agreements?
IM Cannabis raised a total of $2,171,660.40 through note purchase agreements with a third-party lender.
What were the note amounts in the agreements?
The first note amounted to $1,538,749, while the second note was $632,911.50.
What are the interest rates for the notes?
Both notes carry an interest rate of 8%, increasing to 14% in case of default.
How will the proceeds be utilized?
The proceeds will repay creditors and support general corporate purposes, including working capital and growth initiatives.
What is the focus of IM Cannabis Corp.?
IM Cannabis is committed to delivering top-tier cannabis products for medical patients while ensuring sustainable growth and compliance within regulatory frameworks.
