THIS NEWS RELEASE IS INTENDED FOR
DISTRIBUTION IN CANADA ONLY AND IS
NOT INTENDED FOR DISTRIBUTION TO UNITED
STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
TORONTO and GLIL YAM, Israel, Nov. 12,
2024 /PRNewswire/ -- IM Cannabis Corp. ("IM
Cannabis" or the "Company") (NASDAQ: IMCC) (CSE: IMCC),
a leading medical cannabis company with operations in Israel and Germany, is pleased to announce that, further
to its press release dated October 4,
2024 (the "October 4
Release"), the Company has closed its previously announced
non-brokered private placement offering (the "Offering")
effective today (the "Closing Date") through the
issuance of 742,517 Units for gross proceed of C$2,138,448.96. Capitalized terms not otherwise
defined herein have the meanings attributed to them in the
October 4 Release.
Each Unit was sold at a price of C$2.88 per Unit, calculated on the basis of the
deemed price per Share equal to the 10-day volume weighted average
price of the Shares on the Exchange ending on the trading day
preceding October 3, 2024, and
consisted of one Share and one Warrant.
Each Warrant entitles the holder thereof to acquire one Warrant
Share at a price of C$4.32 per
Warrant Share, calculated as a 50% premium to the Offering Price,
at any time prior to 5:00 pm (Toronto
Time) on the date that is twenty-four months following the Closing
Date.
All securities issued under the Offering 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 United
States Securities Act of 1933, as amended.
The Company intends to use the proceeds from the Offering for
the repayment of a loan to A.D.I. CAR ALARMS & STEREO SYSTEMS
Ltd. provided to the Company's subsidiary IMC Holdings Ltd. on
October 11, 2022.
Loan Bonus and Debt
Settlement
The Company also announces that the Company has completed a debt
settlement (the "Debt Settlement" and together, with the
Offering, the "Transactions") in the amount of US$560,000.00, approximately C$758,240.00, based on an exchange rate of
US$1.00 = C$1.354 as at October 3,
2024, as published on the website of the Bank of
Canada, with Oren Shuster, the Company's Chief Executive
Officer, in connection with the Benefit, to preserve the Company's
cash for working capital through the issuance of 110,576 Settlement
Shares and 152,701 Pre-Funded Warrants at a deemed price of
C$2.88.
Each Pre-Funded Warrant will entitle the holder to purchase one
Settlement Share for a price of $0.00001, upon receipt of shareholder approval to
allow Mr. Shuster to become a control person (as defined in the
policies of the Exchange).
All securities issued in consideration for the Benefit 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
United States Securities Act of 1933, as amended.
Related Party Transaction
Oren Shuster, a director and
officer of the Company, Shmulik
Arbel, a director of the Company and Rafael Gabay, an insider of the Company,
(together, the "Participating Insiders") each participated
in the Offering and Mr. Shuster participated in the Debt
Settlement. Mr. Shuster acquired 194,110 Units, 110,576
Settlement Shares and 152,701 Pre-Funded Warrants, Mr. Arbel
acquired 48,349 Units and Mr. Gabay acquired 194,088
Units.
The participation of the Participating Insiders in the Offering
constitutes a "related party transaction", as such term is defined
in MI 61-101 and would require the Company to receive minority
shareholder approval for and obtain a formal valuation for the
subject matter of, the transaction in accordance with MI 61-101,
prior to the completion of such transaction. However, in completing
the Offering, the Company has relied on exemptions from the formal
valuation and minority shareholder approval requirements of MI
61-101, on the basis of subsections 5.5(g) and 5.7(g) –
Financial Hardship of MI 61-101, as the Company is (i) in a
situation of serious financial difficulty; (ii) the Transactions
are designed to improve the financial position of the
Company as (x) the Company would be unable to repay back the
loan provided to A.D.I. CAR ALARMS & STEREO SYSTEMS Ltd.
provided to the Company's subsidiary IMC Holdings Ltd. without the
completion of the Offering and (y) would have been unable to obtain
Loans without Mr. Shuster personal guaranteeing them; (iii) the
circumstances described in Section 5.5(f) of MI 61-101 are not
applicable, and (iv) the Board and independent directors (as such
term is defined in MI 61-101) have, acting in good faith,
determined that (i) and (ii) apply and the terms of the
Transactions are reasonable in the circumstances of the
Company.
The Transactions were approved by the members of the Board who
are independent for the purposes of the Transactions, respectively.
No special committee was established in connection with the
Transactions; however, the independent members of the Board
commissioned a third-party valuator to determine the Benefit.
Further details will be included in a material change report to
be filed by the Company. The Company did not file a material change
report more than 21 days before the closing date of the
Transactions as the participation of Participating Insiders in the
Offering was not definitively known to the Corporation until
closing. In the Company's view, the shorter period was necessary to
permit the Company to close the Transactions in a timeframe
consistent with usual market practice for transactions of this
nature and was reasonable and necessary to improve the Company's
financial position.
Corrective Disclosure – Option Cancellation and
Grants
In addition, the Company wishes to correct the following
disclosures made in the October 4
Release:
Option Cancellation
The Company cancelled an aggregate of 31,305 Options, not 32,305
Options.
Option Grant
The Company granted an aggregate of 31,305 Options, not 32,305
Options. Each Option granted was at an exercise price of
C$3.00, not the greater of: (i)
the Warrant Exercise Price; and (ii) C$3.00 per Share, with an expiry date of two
years from the date of issuance (the "Option Grants"). The
Options Grants vest as follows: one third vest immediately, one
third vests on the six-month anniversary and the final one third
vests on the twelve-month anniversary. All securities issued under
the Option Grants are subject to a statutory hold period of four
months plus one day from the date of issuance, in accordance with
the polices of the Exchange.
Early Warning Disclosure
This press release is being issued in accordance with the
requirements of National Instrument 62-104 – Take-Over Bids and
Issuer Bids and National Instrument 62-103 – The Early
Warning System and Related Take-Over Bid and Insider Reporting
Issues, in connection with the Early Warning Reports (as
defined herein) which will be filed by Oren
Shuster, whose registered address is 22, Hanachal St.
Ra'anana, Israel, 4356990 and
Rafael Gabay, whose registered
address is Shmerling 8, Tel Aviv,
Israel 5251241 (collectively, the "Acquirors") in
connection with their acquisition of securities of the Company,
whose registered address is Kibbutz Glil Yam, Central District,
Israel, 4690500.
Effective November 12, 2024, (i)
Mr. Shuster acquired 194,110 Units in the Offering at a price of
C$2.88 per Unit for an aggregate
subscription amount of C$559,036.80
and settled debt with the Company pursuant to the Debt
Settlement, in the amount of US$560,000.00, approximately C$758,240.00, based on an exchange rate of
US$1.00 = C$1.354 as at October 3,
2024, as published on the website of the Bank of
Canada, and acquired 110,576
Settlement Shares and 152,701 Pre-Funded each at a deemed
price of C$2.88; and (ii) Mr. Gabay
acquired 194,088 Units in the Offering at a price of C$2.88 per Unit for an aggregate subscription
amount of C$558,973.44.
Immediately prior to the completion of the Transactions,
Oren Shuster, along with his joint
actor, Ewave Group Ltd., a privately held entity of which Mr.
Shuster owns and controls 50% of the outstanding voting, owned an
aggregate of 312,145 Common Shares, 21,875 options exercisable into
Common Shares and debentures in the principal amount C$237,214, convertible into up to 46,512 Common
Shares at a deemed price of C$5.10
per Common Share, which represented approximately 13.98% of the
then Company's issued and outstanding Common Shares on a
non-diluted basis (based on 2,232,359 Common Shares issued and
outstanding prior to the completion of the Transactions) and 24.34%
on a partially diluted basis if Mr. Shuster converted all of the
convertible securities owned or controlled by him.
As a result of the Transactions, Mr. Shuster, along with its
joint actor, Ewave Group Ltd., a privately held entity of which Mr.
Shuster owns and controls 50% of the outstanding voting, now
beneficially owns or controls an aggregate of 616,831 Common
Shares, 194,110 Warrants, 152,701 Pre-Funded Warrants, 21,875
options exercisable into Common Shares and debentures in the
principal amount C$237,214,
convertible into up to 46,512 Common Shares at a deemed price of
C$5.10 per Common Share, which
represents approximately 19.99% of the Company's issued and
outstanding Common Shares on a non-diluted basis (based on
3,085,452 Common Shares issued and outstanding as of the date
hereof), and 33.96% on a partially diluted basis if Mr. Shuster
converted all of the convertible securities owned or controlled by
him.
Immediately prior to the completion of the Transactions,
Rafael Gabay, along with his joint
actor, Ewave Group Ltd., a privately held entity of which Mr. Gabay
owns and controls 50% of the outstanding voting, owned an aggregate
of 195,619 Common Shares, 1,500 options exercisable into Common
Shares, 50,549 Common Share purchase warrants exercisable into
Common Shares and debentures in the principal amount C$236,617, convertible into up to 46,395 Common
Shares at a deemed price of C$5.10
per Common Share, which represented approximately 8.76% of the then
Company's issued and outstanding Common Shares on a non-diluted
basis (based on 2,232,359 Common Shares issued and outstanding
prior to the completion of the Transactions) and 20.67% on a
partially diluted basis if Mr. Gabay converted all of the
convertible securities owned or controlled by him.
As a result of the Transactions, Mr. Gabay, along with its joint
actor, Ewave Group Ltd., a privately held entity of which Mr. Gabay
owns and controls 50% of the outstanding voting, now beneficially
owns or controls an aggregate of 389,707 Common Shares, 194,088
Warrants, 1,500 options exercisable into Common Shares, 50,549
Common Share purchase warrants exercisable into Common Shares and
debentures in the principal amount C$236,617, convertible into up to 46,395 Common
Shares at a deemed price of C$5.10
per Common Share, which represents approximately 12.63% of the
Company's issued and outstanding Common Shares on a non-diluted
basis (based on 3,085,452 Common Shares issued and outstanding as
of the date hereof), and 25.42% on a partially diluted basis if Mr.
Gabay converted all of the convertible securities owned or
controlled by him.
The Acquirors acquired the above-noted securities for investment
purposes. In the future, the Acquirors will evaluate their
respective investment in the Company from time to time and may,
based on such evaluation, market conditions and other
circumstances, increase or decrease their respective shareholdings
as circumstances require through market transactions, private
agreements, or otherwise.
The Acquirors currently have no plans or intentions which would
result in a corporate transaction, a sale or transfer of a material
amount of the assets of the Company or any of its subsidiaries, a
change in the board of directors or management of the Company,
including any plans or intentions to change the number or term of
directors or to fill any existing vacancies on the board, a
material change in the Company's business or corporate structure, a
change in the Company's charter, bylaws or similar instruments or
another action which might impede the acquisition of control of
Company by any person or company, a class of securities of the
Company being delisted from, or ceasing to be authorized to be
quoted on, a marketplace, the Company ceasing to be a reporting
issuer in any jurisdiction of Canada, a solicitation of proxies from
securityholders, or an action similar to any of those
enumerated.
Since the previous early warning report filed by the Acquirors
in respect of the Company, the Acquirors' Common Share ownership
positions increased by more than 2% and the Acquirors' acquired
securities convertible into more than 2% of the issued and
outstanding Common Shares, which triggered the requirements to file
an early warning report under applicable Canadian Securities
legislation (together, the "Early Warning Reports").
Copies of the Early Warning Reports may be found at
SEDAR+ at www.sedarplus.ca under IM Cannabis'
profile. For further information, or to obtain copies of the Early
Warning Reports, please contact the Acquirors by emailing
michal.l@imcannabis.com or calling 972 542815033.
About IM Cannabis Corp.
IM Cannabis (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 IM Cannabis ecosystem operates in Israel through its subsidiaries, 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 IM Cannabis products throughout the entire value
chain. In Germany, the IM Cannabis
ecosystem operates through Adjupharm GmbH, where it distributes
cannabis to pharmacies for medical cannabis patients.
Company Contact:
Anna Taranko, Director Investor
& Public Relations
IM Cannabis Corp.
+49 157 80554338
a.taranko@imcannabis.de
Oren Shuster, Chief Executive Officer
IM Cannabis Corp.
+972-77-3603504
info@imcannabis.com
Cautionary Note Regarding Forward-Looking Information
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: the intended use of proceeds and
shareholders approving Mr. Shuster becoming a control person.
Forward-looking statements are based on assumptions that may
prove to be incorrect, including but not limited to: 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 carry out
its stated goals, scope, and nature of operations in Germany, Israel, and other jurisdictions the Company
may operate; the Company using the proceeds as described herein;
and shareholders will approve Mr. Shuster becoming a control
person. 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 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; the Company not using the proceeds as
stated herein; and shareholders not disapproving Mr. Shuster
becoming a control person. 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.
This news release does not constitute an offer to sell or a
solicitation of an offer to sell any of the securities to, or for
the account or benefit of, persons in the
United States or U.S. persons. The securities have not been
and will not be registered under the U.S. Securities Act, or any
state securities laws and may not be offered or sold to, or for the
account or benefit of, persons in the
United States or to U.S. Persons unless registered under the
U.S. Securities Act and applicable state securities laws or an
exemption from such registration is available.
Logo -
https://mma.prnewswire.com/media/1742228/IM_Cannabis_Logo.jpg
View original
content:https://www.prnewswire.co.uk/news-releases/im-cannabis-closes-non-brokered-private-placement-led-by-management-and-concurrent-debt-settlement-302303406.html