IM Cannabis Raises US$2,171,660.40 in Note Purchase Agreements

Core Viewpoint - IM Cannabis Corp. has raised a total of US$2,171,660.40 in debt financing to address its liquidity needs, with two separate note purchase agreements executed with a third-party lender [1][10]. Group 1: First Note Financing - The first note issued to the lender amounts to US$1,538,749, after a 10% original issuance discount [2]. - This note carries an interest rate of 8% per annum, which increases to 14% upon an event of default, and has a maturity of 18 months [3]. - Repayment of the principal and accrued interest will occur in ten equal monthly installments after the maturity date, with the option for early repayment subject to lender consent [4]. - The first note is convertible into common shares at a price of US$1.47 or 90% of the lowest daily volume-weighted average price during the preceding 20 trading days, with a floor price of US$0.29 [5]. - The company issued 228,150 common share purchase warrants to the lender, allowing the purchase of shares at C$3.45 for five years [6]. - Approximately US$500,000 of the proceeds were used to repay existing creditors, enhancing financial flexibility [7]. Group 2: Second Note Financing - The second note issued to the lender totals US$632,911.50, also after a 10% original issuance discount [10]. - Similar to the first note, it bears an 8% interest rate, increasing to 14% upon default, and matures in 18 months [11]. - Repayment terms mirror those of the first note, with ten equal monthly installments post-maturity and conditions for early repayment [12]. - The second note is convertible into common shares at a price of US$1.38 or 90% of the lowest daily VWAP, with a floor price of US$0.275 [13]. - The company issued 93,671 common share purchase warrants to the lender at the same price of C$3.45 for five years [14]. - Similar to the first note, US$500,000 of the proceeds were allocated to repay creditors and improve financial flexibility [15]. Group 3: Regulatory and Compliance - IM Cannabis Corp. is required to file a registration statement with the SEC covering the resale of common shares from both notes within 30 trading days of the respective purchase agreements [8][16]. - All securities issued are subject to a hold period of four months and one day from the issuance date [9][17]. Group 4: Company Overview - IM Cannabis Corp. is a leading medical cannabis company operating in Israel and Germany, focusing on sustainable and profitable growth in these markets [18]. - The company utilizes a data-driven approach and a globally sourced supply chain to enhance its operations [18]. - It operates through subsidiaries that import and distribute cannabis, as well as retail pharmacies and online platforms in Israel, and distributes cannabis to pharmacies in Germany [19].