IM Cannabis Raises US$225,000 of Gross Proceeds in Convertible Note Financing

IM Cannabis raises US$225,000 via a share-settled convertible note with attached warrants, adding non-cash financing that may dilute existing shareholders over time.

Rhea-AI Summary

IM Cannabis (IMCC) closed a US$225,000 gross proceeds convertible note financing in a private placement with an institutional lender on September 2, 2026.

The note carries a principal amount of US$225,000 with a 10% original issue discount and bears interest at 8% per annum, rising to 14% if an event of default occurs. It is not repayable in cash and will be settled solely through issuance of common shares upon conversion.

The conversion price is the lower of a fixed US$3.328 per share or 90% of the lowest daily VWAP over the 20 trading days before conversion, subject to a US$0.665692 floor and a 4.99% beneficial ownership cap. IM Cannabis also issued warrants to purchase up to 77,855 common shares at C$4.63 per share, exercisable immediately until September 2, 2031. Net proceeds are intended for general corporate purposes, and the company plans to file a resale registration statement on Form F-3 with the SEC and reserve sufficient shares for conversions and warrant exercises.

Positive

• US$225,000 raised in gross proceeds through a completed convertible note financing
• Interest on the September Note set at 8% per annum, with no cash repayment required
• Additional upside via 77,855 warrants issued at an exercise price of C$4.63 per share
• Company states net proceeds will support general corporate purposes, providing incremental liquidity

Negative

• Convertible note and 77,855 warrants create potential share dilution for existing shareholders
• Conversion price formula, including 90% of lowest 20-day VWAP with a US$0.665692 floor, may lead to more shares being issued at lower prices
• Interest rate on the note can increase to 14% per annum upon an event of default
• All securities are subject to a four month and one day hold period, limiting immediate liquidity for the investor

News Explained

The closed financing adds a four-month-and-one-day resale restriction, while IMCC’s German exit remains conditional on completing pending transactions.

Separately from the closed financing, IM Cannabis says that completion of the pending transactions announced on August 17, 2026 would leave it retaining its Israeli medical-cannabis operations while selling its German operations.

Completion of those pending transactions is the milestone for that operating-scope change, so the release does not describe the German sale as complete.

The financing’s securities are subject to a four-month-and-one-day hold period from issuance, and resale in the United States or Canada requires an effective registration statement or an applicable exemption under the release’s stated conditions.

Market Context

The effective F-3 resale registration dated June 9 covered up to 17,276,931 shares. Against that pla...

Analysis

The effective F-3 resale registration dated June 9 covered up to 17,276,931 shares. Against that platform record, this financing added another share-settled note and warrants; resale proceeds do not go to the company, leaving share issuance and registration effectiveness as key watchpoints.

Key Figures

Gross proceeds: US$225,000 Note principal: US$225,000 Original issuance discount: 10% +5 more

8 metrics

Gross proceeds US$225,000 September 2, 2026 convertible note financing

Note principal US$225,000 Convertible note issued to institutional investor

Original issuance discount 10% September Note

Interest rate 8% per annum, rising to 14% upon default September Note

Conversion price Lower of US$3.328 per share or 90% of lowest 20-day VWAP; US$0.665692 floor Upon conversion of the September Note

Warrant entitlement 77,855 Common Shares September Note Warrants

Warrant exercise price C$4.63 per Common Share September Note Warrants

Hold period Four months and one day Securities issued under the private placement

Historical Context

5 past events · Latest: Aug 27 (Neutral)

Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
Aug 27	Share consolidation	Neutral	-13.4%	30:1 consolidation began trading on Nasdaq following the prior compliance announcement.
Aug 18	Share consolidation	Neutral	-2.8%	Board approved consolidation intended to support Nasdaq minimum bid-price compliance.
Aug 17	Asset sale agreement	Positive	-12.5%	Agreement targeted European asset sale, liability reduction and streamlined operations.
Aug 13	Quarterly earnings	Negative	-6.2%	Six-month revenue declined while operating and net losses widened.
Aug 07	Convertible financing	Negative	+4.3%	Private placement added share-settled debt and warrants for corporate funding.

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

Pattern Detected

IMCC's recent news reactions diverged from the stated event sentiment in four of five events, including both prior convertible-note financings.

Key Terms

convertible note, original issuance discount, volume-weighted average price, beneficial ownership cap, +2 more

6 terms

convertible note financial

"closing of a US$225,000 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

"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"

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.

beneficial ownership cap regulatory

"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.

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.

form f-3 regulatory

"a resale registration statement on Form F-3 with the SEC"

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, Sept. 2, 2026 /PRNewswire/ -- IM Cannabis Corp. ("IMCC" or the "Company") (Nasdaq: IMCC), a medical cannabis company with operations in Israel and Germany, today announced the closing of a US$225,000 convertible note financing in a private placement with an institutional investor (the "Lender").

Pursuant to a note purchase agreement between the Company and Lender dated September 2, 2026 (the "September Note Purchase Agreement"), the Company issued the Lender a note in the principal amount of US$225,000, with an original issuance discount of 10% (the "September Note").

The September 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 September Note. The September 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 September Note is set to the lower of (i) a fixed price of US$3.328 per Common Share, or (ii) 90% 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$0.665692. The September Note includes customary limitations, including a 4.99% beneficial ownership cap.

In connection with the September Note, the Company issued a warrant to purchase up to 77,855 Common Shares (the "September Note Warrants") at an exercise price of C$4.63 per Common Share. The September Note Warrants became immediately exercisable upon their issuance date, September 2, 2026, and will expire after five years, on September 2, 2031.

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

In connection with the September Note Purchase Agreement, the Company has agreed to reserve sufficient Common Shares for issuance upon conversion of the September Note and exercise of the September 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 Lender.

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 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 Lender 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.

IMCC (Nasdaq: IMCC) is an international company currently operating a medical cannabis platform serving patients in Israel and, through Adjupharm GmbH, Germany.. Following completion of the pending transactions announced by the Company on August 17, 2026, the Company expects to retain its Israeli medical cannabis operations and the German operations will be sold.

The IMCC 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 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

What financing did IM Cannabis (IMCC) announce on September 2, 2026?

IM Cannabis closed a private placement of a US$225,000 principal amount convertible note with an institutional lender, structured with a 10% original issuance discount and payable only in common shares upon conversion, rather than in cash.

What are the key terms of the IMCC September 2026 convertible note?

The September Note has a US$225,000 principal amount, a 10% original issuance discount and bears interest at 8% per annum, rising to 14% if a default continues. It is settled solely in common shares upon conversion, with no cash repayment obligation.

How is the conversion price determined for the IM Cannabis (IMCC) September Note?

The conversion price is the lower of a fixed US$3.328 per share or 90% of the lowest daily VWAP over the 20 trading days before conversion, subject to a US$0.665692 floor and a 4.99% beneficial ownership cap for the lender.

What warrant coverage was issued with the IMCC September 2026 convertible note?

IM Cannabis issued 77,855 warrants to the lender, each exercisable at C$4.63 per common share. These September Note Warrants are immediately exercisable from September 2, 2026 and will expire on September 2, 2031.

How will IM Cannabis use the proceeds from the US$225,000 convertible note financing?

The company intends to use the net proceeds from the September Note for general corporate purposes. It also agreed to reserve sufficient common shares and to file a Form F-3 resale registration statement with the SEC for the underlying securities.

Are the IM Cannabis (IMCC) convertible note and warrants freely tradable immediately?

No. All securities issued in this financing are subject to a four month and one day hold period from issuance and carry required legends. They may only be sold in the United States or Canada under an effective registration statement or an applicable exemption.

What share issuance and registration commitments did IM Cannabis make related to the September Note?

IM Cannabis agreed to reserve sufficient common shares for note conversions and warrant exercises and to file a Form F-3 resale registration statement with the SEC, using commercially reasonable efforts to obtain its effectiveness within agreed timeframes.