IM Cannabis Raises $2,171,660.40 In Debt Financings From An Arm's Length Third Party To Manage The Company's Current Liquidity Requirements

IM Cannabis Corp. ("IMC" or the "Company") (NASDAQ:IMCC), a leading medical cannabis company with operations in Israel and Germany, today announced that it has raised a total of US$2,171,660.40 in debt financings from an arm's length third party (the "Lender") in order to manage the Company's current liquidity requirements.

 

Pursuant to a note purchase agreement between the Company and Lender dated January 7, 2026 (the "First Note Purchase Agreement"), the Company issued the Lender a note in the principal amount of US$1,538,749, after application of an original issuance discount of 10% (the "First Note").

The First Note bears interest at a rate of 8% per annum, increasing to 14% upon the occurrence and continuation of an event of default. The First Note has a maturity date of 18 months from its issuance, with an option for the Lender to extend the maturity if desired (the "First Note Maturity Date").

Following the First Note Maturity Date, the Company will be required to repay the outstanding principal and accrued interest in ten equal monthly instalments, payable on the first day of each month following the 18th month anniversary of its issuance date. The Company retains the right to prepay the First Note, in whole or in part, at any time, subject to the terms set forth in the First Note. Except as expressly permitted, no early repayment may be made without the Lender's consent. All obligations under the First Note are strictly non-recourse, limiting the Lender's remedies to conversion of the First Note or exercise of the First Note Warrants (as defined hereinafter).

The First Note is convertible into common shares in the Capital of the Company (the "Common Shares") at the First Note Conversion Price, which is defined as the lower of: (i) a fixed price of US$1.47 per Common Share, and (ii) 90% of the lowest daily volume-weighted average price ("VWAP") during the 20 consecutive trading days preceding the applicable conversion date. In all cases, the First Note Conversion Price shall not be lower than the Floor Price of US$0.29 per Common Share. The First Note includes customary limitations.

In connection with the financing, the Company issued to the Lender an aggregate of 228,150 Common Share purchase warrants (the "First Note Warrants"). Each First Note Warrant entitles the Lender to a Common Share at a price of C$3.45 per Common Share for a period of five years.

Approximately US$500,000 of the proceeds from the financing were used to directly repay certain existing creditors of the Company, reducing outstanding liabilities and improving financial flexibility. The remaining proceeds will be applied toward general corporate purposes, including working capital and strategic operational initiatives.

Pursuant to the registration rights provisions under the First Note Purchase Agreement, IMC has agreed to file a registration statement on Form F-3 with the U.S. Securities and Exchange Commission (the "SEC"). This registration will cover the resale of the Common Shares issuable upon conversion of the First Note. The Company is required to file the registration statement within 30 trading days of the First Note Purchase Agreement and will use commercially reasonable efforts to secure its effectiveness within the timeframes agreed with the Lender.

All securities issued under the financing are subject to: (i) a four month and one day hold period from the date of issuance and (ii) applicable legends as required pursuant to the Securities Act of 1933, as amended.