IM Cannabis Raised US$550,000 of Gross Proceeds in Convertible Note Financings

IM Cannabis (Nasdaq: IMCC) closed two convertible note financings bringing total gross proceeds to US$550,000 on May 7, 2026.

Rhea-AI Summary

IM Cannabis (Nasdaq: IMCC) closed two convertible note financings bringing total gross proceeds to US$550,000 on May 7, 2026. The financings consist of a US$250,000 note (April 6, 2026) and a US$300,000 note (May 7, 2026), each issued at a 10% discount, with conversion into common shares and attached warrants.

Conversion prices, VWAP caps and 4.99% beneficial ownership limits apply; warrants are exercisable immediately and expire five years from issuance. Proceeds will be used for general corporate purposes and the company will file Form F-3 resale registration statements.

Positive

• Gross proceeds of US$550,000 raised via convertible notes
• Notes issued at 10% original issuance discount
• Warrants attached exercisable immediately, five-year term
• Company to file Form F-3 resale registration statements

Negative

• Notes are convertible only into equity, not repayable in cash
• Conversion prices include low floor prices of US$0.07 and US$0.05
• Beneficial ownership caps limit single-lender holdings to 4.99%

Argus May 8 session

-6.73% close to close Open Argus

Details

News Market Reaction – IMCC

On May 8, the first trading day after this news, IMCC closed 6.73% below the previous close.

Data tracked by StockTitan Argus for the May 8 session.

Market Context

On May 8, the first trading day after this news, the stock closed 6.7% below the previous close. The...

Analysis

On May 8, the first trading day after this news, the stock closed 6.7% below the previous close. The decline reflects market concern over additional equity-linked financing layered onto an already pressured capital structure. IMCC raised US$550,000 through two convertible notes repayable solely in shares, with fixed prices as low as US$0.266 and floor prices down to US$0.05, plus more than 1.4M new warrants. Together with the existing Form F-3 covering up to 9,788,966 resale shares, this pattern of financings could reinforce dilution fears.

Key Figures

New note principal: US$300,000 Total gross proceeds: US$550,000 First note principal: US$250,000 +5 more

New note principal

US$300,000

Second convertible note principal in May 7, 2026 private placement

Total gross proceeds

US$550,000

Aggregate gross proceeds from recent similar convertible note financings

First note principal

US$250,000

Principal of First Note dated April 6, 2026

Original issuance discount

10%

Discount applied to both First and Second Notes

Interest rate

8% (14% on default)

Coupon on both convertible notes

Conversion fixed prices

US$0.339 and US$0.266

Fixed conversion prices for First and Second Notes

Conversion floor prices

US$0.07 and US$0.05

Floor prices under VWAP-based conversion formulas

Warrant coverage

272,861 and 1,127,820 shares

First and Second Note warrant share amounts

Historical Context

5 past events · Latest: Apr 10

5 events

1. Apr 10

   Nasdaq bid notice

   24h Move

   +4.0%

   Nasdaq notified IMCC of non-compliance with $1.00 minimum bid requirement.

2. Mar 31

   Earnings and strategy

   24h Move

   -9.3%

   Reported C$54.7M 2025 revenue, strong German growth, and positive operating cash flow.

3. Mar 17

   Defense-tech LOI

   24h Move

   -26.7%

   Signed LOI to acquire 51% of Blackaxe, entering defense and intelligence markets.

4. Jan 26

   Convertible note financing

   24h Move

   -0.7%

   Raised US$2.17M through two convertible notes with associated five-year warrants.

5. Jan 05

   Board appointment

   24h Move

   -2.7%

   Appointed Alon Dayan to the board, adding homeland security tech expertise.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

convertible note, original issuance discount, volume-weighted average price, VWAP, +3 more

7 terms

convertible note financial

"announced the closing of a US$300,000 convertible note financing in a private placement"

A convertible note is a type of loan that a company gets from investors, which can later be turned into company shares instead of being paid back in cash. It matters because it helps startups raise money quickly without setting a fixed value for the company right away, making it easier to grow and attract investors.

original issuance discount financial

"a note in the principal amount of US$250,000, with an original issuance discount of 10%"

Original issuance discount (OID) is the difference between a debt security’s face value and a lower price at which it is sold when first issued, similar to buying a $1,000 loan for $900. Investors receive the full face value at maturity, so the gap boosts the effective yield above the stated interest rate and affects how income is recognized for returns and taxes. For investors, OID changes expected return, cash flow timing, and reported interest income.

volume-weighted average price financial

"90% of the lowest daily volume-weighted average price ("VWAP") during the 20 consecutive"

Volume-weighted average price (VWAP) is the average price of a stock over a specific time period where each trade is weighted by the number of shares traded, so larger trades influence the average more than small ones. Investors and traders use VWAP as a reference point to judge whether trades are happening at relatively good or poor prices—like checking the average price paid for an item at a market where bulk purchases count more than single-item buys.

VWAP financial

"90% of the lowest daily volume-weighted average price ("VWAP") during the 20 consecutive"

VWAP, or Volume-Weighted Average Price, is a way to find the average price of a stock throughout the trading day, giving more importance to times when more shares are traded. It helps traders see the typical price and decide whether a stock is expensive or cheap compared to its average, similar to finding the average speed during a trip by giving more weight to times when you traveled faster or slower.

beneficial ownership cap financial

"The First Note includes customary limitations, including a 4.99% beneficial ownership cap."

A beneficial ownership cap is a rule that limits how much of a company a single investor or related group can effectively control, even if legal ownership could be higher. Think of it as a speed limit for ownership that prevents any one party from accumulating a controlling stake; it matters to investors because it affects takeover risk, voting power, dilution, and potential returns by shaping who can influence corporate decisions.

warrant financial

"the Company issued a warrant to purchase up to 272,861 Common Shares"

A warrant is a time-limited financial contract that gives its holder the right to buy a company's shares at a set price before a specified date, like a coupon that lets you purchase stock at a fixed discount for a limited time. It matters to investors because warrants offer leveraged exposure to a stock’s upside and can dilute existing shareholders if exercised, so they affect potential gains and the company’s outstanding share count.

Form F-3 regulatory

"to file a resale registration statements on Form F-3 with the U.S. Securities and"

Form F-3 is a U.S. securities filing that lets eligible foreign companies pre-register and then quickly sell shares or other securities to raise money, because they already meet ongoing reporting and size tests. For investors it signals that the company is up-to-date with regulatory disclosure and has an efficient way to issue new securities — similar to a pre-approved credit line — which can mean faster capital raises but also potential dilution of existing holdings.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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TORONTO and GLIL YAM, Israel, May 7, 2026 /PRNewswire/ -- IM Cannabis Corp. ("IMC" or the "Company") (Nasdaq: IMCC), a medical cannabis company with operations in Israel and Germany, today announced the closing of a US$300,000 convertible note financing in a private placement with an institutional investor, bringing the total gross proceeds raised in recent similar financings to US$550,000.

First Note

Pursuant to a note purchase agreement between the Company and Lender dated April 6, 2026 (the "First Note Purchase Agreement"), the Company issued the Lender a note in the principal amount of US$250,000, with 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, as defined in the First Note. The First Note is not repayable in cash and the Company's obligations thereunder will be satisfied solely through the issuance of common shares in the capital of the Company (the "Common Shares") upon conversion.

The conversion price in the First Note is set to the lower of (i) a fixed price of US$0.339 per Common Share, or (ii) 90% of the lowest daily volume-weighted average price ("VWAP") during the 20 consecutive trading days preceding the conversion date, subject to a floor price of US$0.07. The First Note includes customary limitations, including a 4.99% beneficial ownership cap.

In connection with the First Note, the Company issued a warrant to purchase up to 272,861 Common Shares (the "First Note Warrants") at an exercise price of C$0.47 per Common Share. The First Note Warrants became immediately exercisable upon its issuance date, April 6, 2026, and will expire after five years, on April 6, 2031.

The Company used the net proceeds from the First Note for general corporate purposes.

Second Note

Pursuant to a note purchase agreement between the Company and Lender dated May 7, 2026 (the "Second Note Purchase Agreement"), the Company issued the Lender a note in the principal amount of US$300,000, with an original issuance discount of 10% (the "Second Note").

The Second Note bears interest at a rate of 8% per annum, increasing to 14% upon the occurrence and continuation of an event of default. The Second Note is not repayable in cash and the Company's obligations thereunder will be satisfied solely through the issuance of Common Shares upon conversion.

The conversion price in the Second Note was set to the lower of (i) a fixed price of US$0.266 per Common Share, or (ii) 90% of the lowest daily VWAP during the 20 consecutive trading days preceding the conversion date, subject to a floor price of US$0.05. The Second Note includes customary limitations, including a 4.99% beneficial ownership cap.

In connection with the Second Note, the Company issued a warrant to purchase up to 1,127,820 Common Shares (the "Second Note Warrants") at an exercise price of C$0.36 per Common Share. The Second Note Warrants became exercisable immediately upon its issuance date, May, 7, 2026, and will expire after five years on May 7, 2031.

The Company intends to use the net proceeds for general corporate purposes.

In connection with the First Note Purchase Agreement and Second Note Purchase Agreement, the Company has agreed to reserve sufficient Common Shares for issuance upon conversion of the First Note and Second Note, respectively, and exercise of the First Note Warrants and Second Note Warrants, respectively, and to file a resale registration statements on Form F-3 with the U.S. Securities and Exchange Commission (the "SEC") and to use commercially reasonable efforts to secure its effectiveness within the timeframes agreed with the Lender.

All securities issued under the financings described above 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 U.S. Securities Act of 1933, as amended (the "Securities Act"). The private placements of the securities offered to the Lender were made in reliance on an exemption from (x) registration under Section 4(a)(2) of the Securities Act and (y) applicable Canadian securities laws. Accordingly, the securities issued in the private placements may not be offered or sold in the United States or Canada except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws or an exemption pursuant to Canadian securities laws.

About IM Cannabis Corp.

IMC (Nasdaq: IMCC) is an international company focused on building and scaling innovative businesses and technologies across global markets. The Company currently operates a medical cannabis platform serving patients in Israel and Germany while evaluating opportunities to expand into additional technology-driven sectors.

The IMC ecosystem operates in Israel through its subsidiaries, which import and distribute cannabis to medical patients, leveraging years of proprietary data and patient insights. The Company also operates medical cannabis retail pharmacies and online platforms, 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.

Company Contact:

Michal Efraty
Investor & Public Relations
IM Cannabis Corp.
michal@efraty.com

Oren Shuster, CEO
IM Cannabis Corp.
info@imcannabis.com

Disclaimer for Forward-Looking 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: the receipt of and use of proceeds from the financings and the preparation, timing and filing of registration statement with the SEC. 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 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 multi front war Israel is facing 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's inability to use the proceeds as set out herein; and the Company's inability to file a registration statement in the timelines outlined herein or at all.

Please see the other risks, uncertainties and factors set out under the heading "Risk Factors" in the Company's annual report for the year ended December 31, 2025, 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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SOURCE IM Cannabis Corp

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How much did IM Cannabis (IMCC) raise in the May 7, 2026 convertible note financings?

IM Cannabis raised US$550,000 in total across two convertible notes. According to IM Cannabis, the company issued a US$250,000 note on April 6, 2026 and a US$300,000 note on May 7, 2026, each with a 10% issuance discount.

What are the conversion terms for IM Cannabis's April and May 2026 notes (IMCC)?

Each note converts into common shares at the lower of a fixed price or 90% of 20-day low VWAP. According to IM Cannabis, the First Note fixed price is US$0.339 (floor US$0.07) and the Second Note fixed price is US$0.266 (floor US$0.05).

Do the IM Cannabis (IMCC) notes accrue interest and how is default treated?

Both notes bear 8% annual interest, rising to 14% upon an event of default. According to IM Cannabis, the increased rate applies upon the occurrence and continuation of an event of default as defined in each note.

What warrant rights were issued with IM Cannabis's convertible notes (IMCC)?

IM Cannabis issued warrants exercisable immediately with five-year expirations. According to IM Cannabis, the First Note included warrants for 272,861 shares at C$0.47 and the Second Note included warrants for 1,127,820 shares at C$0.36.

How will IM Cannabis (IMCC) use the proceeds and what resale steps will it take?

The company intends to use net proceeds for general corporate purposes and to register resale. According to IM Cannabis, it will reserve common shares for conversion and file Form F-3 registration statements to enable resale under agreed timeframes.