TORONTO and GLIL YAM,
Israel, May
8, 2023 /PRNewswire/ -- IM Cannabis Corp. (the
"Company" or "IMC") (NASDAQ: IMCC) (CSE: IMCC), an
international medical cannabis company, is announcing that it has
closed the previously announced securities for debt settlement
transaction (the "Debt Settlement") with L5 Capital Inc.
("L5 Capital"), a company wholly-owned and controlled by
Marc Lustig, the executive chairman
and a director of the Company. Pursuant to the Debt Settlement, the
Company settled outstanding indebtedness of $838,776 (approximately US$615,615) through issuing 492,492 units (the
"Units") at a price of US$1.25
per Unit. Each Unit consists of one common share of the Company
(each, a "Common Share") and one Common Share purchase
warrant (each, a "Warrant"). Each Warrant entitles L5
Capital to purchase one additional Common Share at an exercise
price of US$1.50 per Common Share for
a period of 36 months from the date of issuance.
All securities issued are subject to a statutory hold period of
four months and one day from the date of issuance in accordance
with applicable Canadian securities legislation.
The Debt Settlement is a "related party transaction" pursuant to
Multilateral Instrument 61-101 – Protection of Minority Security
Holders in Special Transactions ("MI 61-101") by virtue
of L5 Capital being wholly-owned and controlled by an insider of
the Company. The Company relied on Sections 5.5(a) and 5.7(1)(a) of
MI 61-101 for exemptions from the requirements to obtain a formal
valuation and minority shareholder approval, respectively, because
the fair market value securities issued to the director was below
25% of the Company's market capitalization for the purposes of MI
61-101.
Early Warning
L5 Capital Inc., a company controlled by Marc Lustig (collectively, the
"Acquiror"), acquired the 492,492 Common Shares and 492,492
Warrants issued pursuant to the Debt Settlement (the
"Acquisition").
Immediately prior to the Acquisition, the Acquiror beneficially
owned or controlled 433,558 Common Shares, representing
approximately 3.37% of the Company's issued and outstanding Common
Shares on a non-diluted basis (based on 12,846,645 Common
Shares then issued and outstanding). As a result of the
Acquisition, the Acquiror now beneficially owns or controls an
aggregate of 926,050 Common Shares, representing approximately an
additional 6.94% of the Company's issued and outstanding Common
Shares on a non-diluted basis (based on 13,339,137 Common Shares
issued and outstanding as of the date hereof).
Immediately prior to the Acquisition, the Acquiror beneficially
owned or controlled 208,868 securities convertible into Common
Shares, representing approximately an additional 1.60% of the
Company's issued and outstanding Common Shares on a partially
diluted basis (based on 12,846,645 Common Shares then issued and
outstanding). As a result of the Acquisition, the Acquiror now
beneficially owns or controls an aggregate of 701,360 securities
convertible into Common Shares, representing approximately an
additional 5.00% of the Company's issued and outstanding Common
Shares on a partially diluted basis (based on 13,339,137 Common
Shares issued and outstanding as of the date hereof).
If the Acquiror were to exercise his securities convertible or
exercisable for Common Shares, including the Warrants acquired
pursuant to the Acquisition, they would own or control an aggregate
of 1,627,410 Common Shares, representing 11.59% of the issued and
outstanding Common Shares on a partially diluted basis.
The Acquiror acquired the securities for general investment
purposes only. The Acquiror may in the future take such actions in
respect of his holdings in IMCC as he may deem appropriate based on
his assessment of market conditions and any other conditions he
considers relevant at the time, including the purchase of
additional Common Shares through open market or privately
negotiated transactions or the sale of all or a portion of his
holdings in the open market or in privately negotiated transactions
to one or more purchasers, subject in each case to applicable
securities laws.
As a result of the Debt Settlement, the Acquiror now owns more
than 10% of the Company's issued and outstanding Common Shares on a
partially diluted basis, which triggered the requirement to file an
early warning report under applicable Canadian securities
legislation.
A copy of the early warning report may be found at www.sedar.com
under the Company's profile. For further information, or to obtain
a copy of the early warning report, please contact the Company at
info@imcannabis.com.
About IM Cannabis Corp.
IMC (Nasdaq: IMCC) (CSE: IMCC) is an international cannabis
company that provides premium cannabis products to medical patients
in Israel and Germany, two of the largest medical cannabis
markets. The Company has recently exited operations in Canada to pivot its focus and resources to
achieve sustainable and profitable growth in its highest value
markets, Israel and Germany. The Company leverages a transnational
ecosystem powered by a unique data-driven approach and a globally
sourced product supply chain. With an unwavering commitment to
responsible growth and compliance with the strictest regulatory
environments, the Company strives to amplify its commercial and
brand power to become a global high-quality cannabis player.
The IMC ecosystem operates in Israel through its commercial relationship
with Focus Medical Herbs Ltd. ("Focus Medical"), which imports and
distributes cannabis to medical patients, leveraging years of
proprietary data and patient insights. The Company also operates
medical cannabis retail pharmacies, online platforms, distribution
centers, and logistical hubs in Israel that enable the safe delivery and
quality control of IMC products throughout the entire value chain.
In Germany, the IMC ecosystem
operates through Adjupharm GmbH, where it distributes cannabis to
pharmacies for medical cannabis patients. Until recently, the
Company also actively operated in Canada through Trichome, where it cultivated,
processed, packaged, and sold premium and ultra-premium cannabis at
its own facilities under the WAGNERS and Highland Grow brands for
the adult-use market in Canada.
Company Contact:
Oren Shuster, CEO
IM Cannabis Corp.
info@imcannabis.com
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