Through continuous, active cost management, IMC reduced its
annual G&A costs by 49% in 2023 and is now looking to
significantly reduce its financial costs.
TORONTO and GLIL YAM,
Israel, May
29, 2024 /PRNewswire/ -- IM Cannabis Corp. (CSE: IMCC)
(NASDAQ: IMCC) (the "Company", "IM Cannabis", or
"IMC"), a leading medical cannabis company with operations
in Israel and Germany, is pleased to announce that in order
to preserve its cash for to support accelerated growth in
Germany it has closed a
non-brokered private placement (the "Offering") of secured
convertible debentures of the Company (each, a "Debenture")
for aggregate proceeds of $2,091,977.
The Debentures are being issued to holders of short-term loans and
obligations owed by the Company or its wholly owned subsidiaries.
The Debentures will mature on May 26,
2025, and will not incur interest except in the event of
default. The Debentures may be converted into common shares in the
Company (each, a "Share") at a conversion price of
$0.85 per Share.
"Active cost management has been our focus since the beginning
of 2023. Last year we concentrated on reducing our operating
expenses, reducing our 2023 G&A expenses -49% vs 2022," said
Oren Shuster, CEO of
IMC. "This year we looked at our financial costs. By
renegotiating our debt, we expect a significant reduction in our
financing costs. Our goal is to free resources to drive
accelerated growth in Germany,
where we currently see the biggest potential following the
April 1st
legalization."
RELATED PARTY TRANSACTIONS
Oren Shuster, a director and the
Chief Executive Officer of the Company (the "Insider") has
subscribed for an aggregate of $237,214 of Debentures in the Offering. The
Insider's participation in the Offering (the "Insider
Transaction") is a "related party transaction" within the
meaning of Multilateral Instrument 61-101 Protection of Minority
Security Holders in Special Transactions ("MI 61-101").
The Company intends to rely on the exemptions from the formal
valuation and minority shareholder approval requirements of MI
61-101 under sections 5.5(a) and 5.7(1)(a) of MI 61-101 as the fair
market value of the Insider Transaction does not exceed 25% of the
Company's market capitalization. As the material change report
disclosing the Insider Transaction is being filed less than 21 days
before the transaction, there is a requirement under MI 61–101 to
explain why the shorter period was reasonable or necessary in the
circumstances. In the view of the Company, it is necessary to
immediately close the Insider Transaction and therefore, such
shorter period is reasonable and necessary in the circumstances to
improve the Company's financial position.
EARLY WARNING REPORT
Oren Shuster will file an early
warning report in accordance with National Instrument
62-104 Take-Over Bids and Issuer Bids ("NI
62-104") and National Instrument 62-103 The Early
Warning System and Related Take-Over Bid and Insider Reporting
Issues ("NI 62-103"). On May
26, 2024, Mr. Shuster acquired a Debenture in the principal
amount of CAD$237,214 pursuant to the
Offering (the "Acquisition"), which was issued in full
satisfaction of CAD$237,214 of debt
owed by the Company to him.
Immediately prior to the Acquisition, Mr.
Shuster beneficially owned or controlled 1,872,870 Shares,
856,704 Warrants and 131,250 Stock Options of the Company, which
represented approximately 13.98% of the then outstanding shares of
the Company on a non-diluted basis and 19.89% on a partially
diluted basis if Mr. Shuster converted all of the convertible
securities held by him. As a result of the Acquisition, Mr.
Shuster now beneficially owns or controls an aggregate of
1,872,870 Shares, 856,704 Warrants, 131,250 Stock Options and a
Debenture in the principal amount of CAD$237,214 of the Company (the Debenture is
convertible into up to 279,075 Shares at $0.85 per Share) which represented approximately
1.8% of the Company's issued and outstanding Shares on a
non-diluted basis (based on 13,394,136 Shares issued and
outstanding as of the date hereof), and 23.44% on a partially
diluted basis if Mr. Shuster converted all of the convertible
securities held by him.
Mr. Shuster acquired the securities for general investment
purposes only. Mr. Shuster may in the future take such actions
in respect of his holdings in IMC 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 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.
Since the previous early warning report filed by Mr.
Shuster in respect of the Company, Mr. Shuster's Share
ownership position increased by more than 2% and Mr.
Shuster acquired securities convertible into more than 2% of
the issued and outstanding Shares, which triggered the requirement
to file an early warning report under applicable Canadian
Securities legislation (the "Early Warning Report").
A copy of the Early Warning Report may be found at SEDAR+ at
www.sedarplus.ca under IMC's profile. For further information,
or to obtain a copy of the early warning report, please contact
Oren Shuster at +972-77-3603504.
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., 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 center, 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 Financial Corp and its wholly owned subsidiaries.
The Company has exited operations in Canada and considers these operations
discontinued.The securities to be offered pursuant to the Offering
have not been, and will not be, registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities
Act") or any United States
state securities laws, and may not be offered or sold in
the United States or to, or for
the account or benefit of, United
States persons absent registration or any applicable
exemption from the registration requirements of the U.S. Securities
Act and applicable United States
state securities laws. This news release shall not constitute an
offer to sell or the solicitation of an offer to buy securities in
the United States, nor shall there
be any sale of these securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful.
Company Contact:
Anna Taranko, Director Investor
& Public Relations
IM Cannabis Corp.
+49 157 80554338
a.taranko@imcannabis.de
Oren Shuster, CEO
IM Cannabis Corp.
+972-77-3603504
info@imcannabis.com
Forward-Looking Information and Cautionary Statements
This press release contains forward-looking information or
forward-looking statements under applicable Canadian and
United States securities laws
(collectively, "forward-looking statements"). All information that
addresses activities or developments that we expect to occur in the
future are forward-looking statements. Forward-looking statements
are often, but not always, identified by the use of words such as
"seek", "anticipate", "believe", "plan", "estimate", "expect",
"likely" and "intend" and statements that an event or result "may",
"will", "should", "could" or "might" occur or be achieved and other
similar expressions. Forward-looking statements are based on the
estimates and opinions of management on the date the statements are
made. In the press release, such forward-looking statements
include, but are not limited to, statements relating to:
significant reduction in our financing costs; the timing and impact
of the legalization of medicinal cannabis in Germany; and the Company's accelerated growth
in Germany.
Forward-looking statements are based on assumptions that may
prove to be incorrect, including but not limited to: the Company's
ability significant reduction in our financing costs; the Company's
ability to focus and resources to achieve sustainable and
profitable growth in its highest value markets; the Company's
ability to mitigate the impact of the Israel-Hamas war on the
Company; the Company's ability to take advantage of the
legalization of medicinal cannabis in Germany; the Company's ability to host a
teleconference meeting as stated; and the Company's ability to
carry out its stated goals, scope, and nature of operations in
Germany, Israel, and other jurisdictions the Company
may operate. The above lists of forward-looking statements and
assumptions are not exhaustive. Since forward-looking statements
address future events and conditions, by their very nature they
involve inherent risks and uncertainties. Actual results may differ
materially from those currently anticipated or implied by such
forward looking statements due to a number of factors and risks.
These include: the failure of the Company to comply with applicable
regulatory requirements in a highly regulated industry; unexpected
changes in governmental policies and regulations in the
jurisdictions in which the Company operates; the Company's ability
to continue to meet the listing requirements of the Canadian
Securities Exchange and the NASDAQ Capital Market; any unexpected
failure to maintain in good standing or renew its licenses; the
ability of the Company and its subsidiaries (collectively, the
"Group") to deliver on their sales commitments or growth
objectives; the reliance of the Group on third-party supply
agreements to provide sufficient quantities of medical cannabis to
fulfil the Group's obligations; the Group's possible exposure to
liability, the perceived level of risk related thereto, and the
anticipated results of any litigation or other similar disputes or
legal proceedings involving the Group; the impact of increasing
competition; any lack of merger and acquisition opportunities;
adverse market conditions; the inherent uncertainty of production
quantities, qualities and cost estimates and the potential for
unexpected costs and expenses; risks of product liability and other
safety-related liability from the usage of the Group's cannabis
products; supply chain constraints; reliance on key personnel; the
risk of defaulting on existing debt; risks surrounding war,
conflict and civil unrest in Eastern
Europe and the Middle East,
including the impact of the Israel-Hamas war on the Company, its
operations and the medical cannabis industry in Israel; risks associated with the Company
focusing on the Israel and
Germany markets; the inability of
the Company to achieve sustainable profitability and/or increase
shareholder value; the inability of the Company to actively manage
costs and/or improve margins; the inability of the company to grow
and/or maintain sales; the inability of the Company to meet its
goals and/or strategic plans; the inability of the Company to
reduce costs and/or maintain revenues; the Company's inability to
take advantage of the legalization of medicinal cannabis in
Germany; and the Company's
inability to host a teleconference meeting as stated. Please see
the other risks, uncertainties and factors set out under the
heading "Risk Factors" in the Company's annual report dated
March 28, 2024, which is available on
the Company's issuer profile on SEDAR+ at www.sedarplus.ca and
Edgar at www.sec.gov/edgar. Any forward-looking statement included
in this press release is made as of the date of this press release
and is based on the beliefs, estimates, expectations and opinions
of management on the date such forward looking information is made.
The Company does not undertake any obligation to update
forward-looking statements except as required by applicable
securities laws. Investors should not place undue reliance on
forward-looking statements. Forward looking statements contained in
this press release are expressly qualified by this cautionary
statement.
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