IM Cannabis Raises US$1,200,000 of Gross Proceeds in Convertible Note Financing

The financing adds interest-bearing debt and potential share dilution through conversion rights and accompanying warrants.

Rhea-AI Summary

IM Cannabis (Nasdaq: IMCC) closed a convertible note financing raising US$1,200,000 in gross proceeds from an existing institutional investor.

The US$1,200,000 principal note carries a 15% original issuance discount and 4% annual interest, rising to 14% during a continuing default. It matures in 28 months, with 10 equal monthly instalments beginning after month 18. Conversion into common shares uses the lower of US$0.610 or 85% of the lowest daily volume-weighted average price over the preceding 20 trading days, subject to a US$0.1449 floor.

The investor also received immediately exercisable warrants for up to 3,936,330 common shares at US$0.610, expiring November 3, 2029, with anti-dilution and ratchet adjustments. Beginning January 1, 2027, the company may request additional convertible note purchases of up to US$1,200,000 each three-month period, with accompanying warrants, on substantially the same terms.

2 points · 1 major

MixediHow this balance works

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It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance worksHow Sentiment works

1 major · 6 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Major pointUS$1,200,000 gross proceeds raised through a completed financing with an existing institutional investor. 1× market cap
• Moderate point. Forward-looking: it has not happened yet and may not happen.Additional funding requests permitted from January 1, 2027: up to US$1,200,000 each three-month period, with accompanying warrants. 1× market cap

Negative

• Major pointUS$1,200,000 principal note carries a 15% original issuance discount. 1× market cap
• Minor point. Forward-looking: it has not happened yet and may not happen.4% annual interest rises to 14% upon a continuing event of default.
• Minor point. Forward-looking: it has not happened yet and may not happen.28-month maturity requires repayment in 10 equal monthly instalments beginning after month 18.
• Minor point. Forward-looking: it has not happened yet and may not happen.Conversion rights permit common-share dilution at the lower of US$0.610 or 85% of the lowest daily volume-weighted average price over the preceding 20 trading days, subject to a US$0.1449 floor.
• Minor point. Forward-looking: it has not happened yet and may not happen.Up to 3,936,330 warrant shares at US$0.610 create potential dilution; warrants are immediately exercisable through November 3, 2029.
• Minor point. Forward-looking: it has not happened yet and may not happen.Warrant anti-dilution and ratchet provisions allow adjustments to warrant terms.

News Explained

The company also agreed to reserve sufficient shares for note conversion and warrant exercise and file an F-3 resale registration statement, using commercially reasonable efforts to obtain effectiveness within agreed timelines. Resales require an effective registration statement or an applicable exemption, subject to a four-month-and-one-day Canadian-law hold.

Key Figures

Gross proceeds: US$1,200,000 Original issuance discount: 15% Interest rate: 4% per annum; 14% upon an event of default +5 more

Gross proceeds

US$1,200,000

Convertible note financing

Original issuance discount

15%

November Note

Interest rate

4% per annum; 14% upon an event of default

November Note

Maturity and repayment

28 months; 10 equal monthly instalments beginning after the 18th month

November Note

Additional note option

Up to US$1,200,000 in each three-month period

At the Company's discretion beginning January 1, 2027

Conversion price

Lower of US$0.610 per share or 85% of the lowest daily volume-weighted average price over 20 consecutive trading days; floor of US$0.1449 per share

November Note

Warrants

Up to 3,936,330 common shares at US$0.610 per share

November Note Warrants

Beneficial ownership cap

4.99%

November Note limitation

Key Terms

convertible note, private placement, volume-weighted average price, anti-dilution, +1 more

5 terms

convertible note financial

"closing of a US$1,200,000 convertible note financing"

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.

private placement financial

"financing in a private placement with an existing institutional investor"

A private placement is a sale of securities directly to a selected group of investors, typically institutions or accredited investors, instead of through a public offering. It lets a company raise money faster and with fewer regulatory steps; for existing shareholders it matters because the newly issued shares, often sold at a discount, increase the share count and can dilute their ownership.

volume-weighted average price financial

"85% of the lowest daily volume-weighted average price"

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.

anti-dilution financial

"include certain anti-dilution and ratchet adjustment provisions"

A provision that protects an investor’s ownership stake or the value of convertible securities when a company issues new shares at a lower price. It adjusts the investor’s number of shares or the conversion price so their percentage of ownership or economic interest isn’t unfairly reduced — like getting a bigger slice of cake if the baker cuts more pieces, preserving your share of the whole.

resale registration statement regulatory

"to file a resale registration statement on Form F-3"

A resale registration statement is a document filed with regulators that allows existing shareholders to sell their shares to the public. It provides the necessary legal approval and information for these shares to be resold on the market, helping to increase the availability of shares for trading. For investors, it signals that shares held by current owners can be offered for sale, potentially affecting share prices and market liquidity.

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

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VANCOUVER and GLIL YAM, Israel, Nov. 4, 2026 /PRNewswire/ -- IM Cannabis Corp. ("IMCC" or the "Company") (Nasdaq: IMCC), a medical cannabis company with operations in Israel, today announced the closing of a US$1,200,000 convertible note financing in a private placement with an existing institutional investor (the "Investor").

Pursuant to a note purchase agreement between the Company and Investor dated November 4, 2026 (the "November Note Purchase Agreement"), the Company issued the Investor a convertible promissory note in the principal amount of US$1,200,000, with an original issuance discount of 15% (the "November Note").

The November Note bears interest at a rate of 4% per annum, increasing to 14% upon the occurrence and continuation of an event of default, as defined in the November Note. The November Note provides the Investor the option of converting on one or more occasions all or part of the outstanding balance of the Company's obligations thereunder through the issuance of common shares in the capital of the Company (the "Common Shares").

The November Note matures 28 months from issuance and is repayable in 10 equal monthly instalments beginning after the 18^th month. Under the November Note Purchase Agreement, beginning January 1, 2027 the Company may, at its discretion, request that the Investor purchase additional convertible notes of up to US$1,200,000 in each three-month period, each with accompanying warrants, on substantially the same terms.

The conversion price in the November Note is set to the lower of (i) a fixed price of US$0.610 per Common Share, or (ii) 85% of the lowest daily volume-weighted average price during the 20 consecutive trading days preceding the conversion date, subject to a floor price of US$0.1449 per Common Share. The November Note includes customary limitations, including a 4.99% beneficial ownership cap.

In connection with the November Note, the Company also issued the Investor a warrant to purchase up to 3,936,330 Common Shares (the "November Note Warrants") at an exercise price of US$0.610 per Common Share. The November Note Warrants became immediately exercisable upon their issuance date, November 4, 2026, and will expire after three years, on November 3, 2029. The November Note Warrants include certain anti-dilution and ratchet adjustment provisions.

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

In connection with the November Note Purchase Agreement, the Company has agreed to reserve sufficient Common Shares for issuance upon conversion of the November Note and exercise of the November Note Warrants and to file a resale registration statement 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 Investor.

All securities issued under the financing described above are subject to: (i) a four month and one day hold period from the date of issuance under applicable Canadian securities laws and (ii) applicable legends as required pursuant to the U.S. Securities Act of 1933, as amended (the "Securities Act"). The private placement of the securities offered to the Investor was 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 placement 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.

IM Cannabis Corp. (Nasdaq: IMCC) is an international company currently operating a medical cannabis platform serving patients in Israel.

The Company's 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 IMCC's products throughout the value chain.

Company Contact:

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

Oren Shuster, Chief Executive Officer
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 financing and the preparation, timing and filing of the 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 market; 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 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.

What are the interest rate and repayment terms of IM Cannabis's convertible note financing?

The US$1,200,000 principal note bears 4% annual interest, increasing to 14% upon the occurrence and continuation of an event of default. It matures 28 months from issuance and is repayable in 10 equal monthly instalments beginning after the 18th month. The note carries a 15% original issuance discount.

What conversion price applies to IMCC's new convertible note?

The conversion price is the lower of US$0.610 per common share or 85% of the lowest daily volume-weighted average price during the 20 consecutive trading days before conversion, subject to a US$0.1449 per-share floor. The investor may convert all or part of the outstanding balance on one or more occasions.

What ownership limit applies to the investor in IM Cannabis's convertible note financing?

The convertible note includes a 4.99% beneficial ownership cap, limiting the investor's ownership under its terms.