IM Cannabis Closes US$1.2 Million Convertible Note Placement

IM Cannabis announced on November 4, 2026 (IMCC ) that it had closed a private placement with an existing institutional investor, issuing a convertible promissory note with a principal amount of US$1.2 million. The Israel-focused medical cannabis company set a 15% original issuance discount and intends to use the net proceeds for general corporate purposes.

The note carries annual interest of 4%, increasing to 14% when an event of default, as defined in the note, occurs and continues. It matures 28 months after issuance and is repayable in 10 equal monthly instalments beginning after the 18th month. The schedule therefore combines deferred monthly repayments with investor-held conversion rights, allowing all or part of the outstanding balance to be converted into common shares on one or more occasions.

The conversion price is the lower of a fixed US$0.610 per share or 85% of the lowest daily volume-weighted average price during the 20 consecutive trading days before conversion, subject to a floor of US$0.1449 per share. This formula means the announcement does not fix the number of shares that may be issued for the note: that will depend on the balance converted and the applicable price. A 4.99% beneficial-ownership cap is also included in the note.

A separate warrant gives the investor the right to purchase up to 3,936,330 common shares at an exercise price of US$0.610 per share. It was immediately exercisable upon issuance and expires on November 3, 2029. The warrant includes anti-dilution and ratchet adjustment provisions.

The agreement also creates a possible path to further funding. Beginning January 1, 2027, IM Cannabis may, at its discretion, request that the investor purchase up to US$1.2 million in additional convertible notes in each three-month period. Each purchase would include accompanying warrants and substantially the same terms. This is a company right to request future purchases, not an announced completion of additional financing.

IM Cannabis agreed to reserve sufficient common shares for both note conversions and warrant exercises. It also agreed to file a resale registration statement on Form F-3 with the U.S. Securities and Exchange Commission and use commercially reasonable efforts to secure effectiveness within the timeframes agreed with the investor.

IM Cannabis’s September 2 announcement documented a separate US$225,000 private placement with a 10% original issuance discount and 8% annual interest. Unlike the new note, that earlier note was not repayable in cash and was to be satisfied solely through common-share issuance upon conversion.

The result is a financing whose eventual mix of scheduled repayment and share issuance remains open. The investor controls conversions and whether to exercise the warrant, while IM Cannabis controls whether to seek further note purchases in 2027. Those choices will determine whether the initial agreement remains a single financing or becomes the first in a series carrying additional equity-linked obligations.