/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
TORONTO and GLIL YAM, Israel, Jan. 13,
2023 /CNW/ - IM Cannabis Corp. (the "Company"
or "IMC") (NASDAQ: IMCC) (CSE: IMCC), an international
medical cannabis company, is pleased to announce a non-brokered
private placement of a minimum of 400,000 units and a maximum of
2,960,000 units of the Company (each a "Unit") at a price of
US$1.25 per Unit for aggregate
gross proceeds of a minimum of US$500,000 and a maximum of US$3,700,000, which will be offered for sale to
purchasers resident in Canada
(except Quebec) and/or other
qualifying jurisdictions pursuant to the listed issuer financing
exemption under Part 5A of National Instrument 45-106 –
Prospectus Exemptions (the "Listed Issuer Financing
Exemption Offering" or "LIFE Offering"). Each Unit
consists of one common share of the Company (each a "Common
Share") and one Common Share purchase warrant (each a
"Warrant"). Each Warrant entitles its holder to purchase one
additional Common Share at an exercise price of US$1.50 for a period of 36 months from the date
of issue. The Listed Issuer Financing Exemption Offering will be
led by Marc Lustig, Executive
Chairman of the Company. The Listed Issuer Financing Exemption
Offering is expected to be completed in multiple closings, with the
first closing expected to occur on or about January 16, 2023 and the final closing to occur
no later than March 2, 2023. The
securities issued pursuant to the Listed Issuer Financing Exemption
Offering will not be subject to any statutory hold period in
accordance with applicable Canadian securities laws.
There is an offering document related to the Listed Issuer
Financing Exemption Offering that can be accessed under the
Company's profile at www.sedar.com and on the Company's
website at www.imcannabis.com. Prospective investors should
read this offering document before making an investment
decision.
Concurrent with the Listed Issuer Financing Exemption Offering,
IMC is selling, on a non-brokered private placement basis, an
additional 2,000,000 Units on the same terms and at the same price
for additional aggregate gross proceeds of US$2,500,000 (the "Concurrent
Offering"). The Concurrent Offering will be led by Company
insiders, including Oren Shuster,
Chief Executive Officer and Director of the Company. The securities
issued pursuant to the Concurrent Offering will be subject to a
statutory hold period of four months and one day in accordance with
applicable Canadian securities laws. Closing of the Concurrent
Offering is expected to occur on or about January 16, 2023. The aggregate gross proceeds
from the Listed Issuer Financing Exemption Offering and the
Concurrent Offering shall be up to US$5,500,000
The Company intends to use the net proceeds from each of the
Listed Issuer Financing Exemption Offering and the Concurrent
Offering for general working capital purposes. Completion of the
Listed Issuer Financing Exemption Offering is not conditional upon
the completion of the Concurrent Offering or vice versa.
As a result of the expected participation by insiders of the
Company, each of the Listed Issuer Financing Exemption Offering and
the Concurrent Offering may be considered a "related party
transaction" pursuant to Multilateral Instrument 61-101 -
Protection of Minority Security Holders in Special
Transactions ("MI 61-101"). The Company expects that
both the Listed Issuer Financing Exemption Offering and the
Concurrent Offering will be exempt from the requirements to obtain
a formal valuation and minority shareholder approval, respectively,
because the fair market value of the Insiders' participation in
each case will be below 25% of the Company's market capitalization
for the purposes of Sections 5.5(a) and 5.7(1)(a) of MI 61-101.
None of the securities have been registered under the United
States Securities Act of 1933, as amended (the "U.S. Securities
Act"), or any state securities laws. Accordingly, the Units may
not be offered or sold within the United
States, its territories or possessions, any state of
the United States or the
District of Columbia
(collectively, the "United
States") or to, or for the account or benefit of, U.S.
persons (as such term is defined in Regulation S under the U.S.
Securities Act) unless registered under the U.S. Securities Act and
all applicable state securities laws or an exemption from such
registration requirements is available. This press release does not
constitute an offer to sell or a solicitation of an offer to buy
any Units within the United States
or to, or for the account or benefit of, U.S. persons.
Update on Trichome Financial Corp.
Insolvency Proceedings
On January 9, 2023, the Ontario
Superior Court of Justice issued an order in respect of a motion
brought by Trichome Financial Corp. ("Trichome") and certain
of its wholly-owned subsidiaries (collectively with Trichome, the
"Trichome Group") to approve, among other things: the sale
and investment solicitation process (the "SISP") in respect
of the business and assets of the Trichome Group; and a stalking
horse share purchase agreement (the "Stalking Horse Purchase
Agreement") between the Trichome Group and L5 Capital Inc. (the
"Purchaser") dated December 12,
2022, solely for the purposes of acting as the stalking
horse bid in the SISP (the "Stalking Horse Bid"). The SISP
establishes a process to solicit interest for the sale of any or
all of the Trichome Group's businesses and assets.
At the conclusion of the SISP, and pursuant to its terms, if the
Stalking Horse Bid is selected as the successful bid, the Trichome
Group will seek an approval and vesting order (an "AVO")
from the Court authorizing the Trichome Group to proceed with the
transaction contemplated under the Stalking Horse Purchase
Agreement. Pursuant to the Stalking Horse Purchase Agreement, the
Purchaser will acquire all of the issued and outstanding shares in
the capital of Trichome JWC Acquisition Corp. ("TJAC"), MYM
Nutraceuticals Inc. ("MYM"), and their respective
subsidiaries, Trichome Retail Corp., MYM International Brands Inc.
("MYMB") and Highland Grow Inc. (collectively, the
"Purchased Entities"). The consideration payable under the
Stalking Horse Purchase Agreement is approximately C$6,300,000 and includes a base cash purchase
price of C$5,000,000 and certain
deferred consideration payable pursuant to secured limited recourse
promissory notes.
The Stalking Horse Purchase Agreement contemplates a reverse
purchase transaction where the Purchaser will acquire, pursuant to
the AVO, the Purchased Entities and their respective assets, free
and clear of any and all claims and liabilities (collectively, the
"Excluded Claims and Liabilities") other than those
specifically assumed pursuant to the Stalking Horse Purchase
Agreement. Pursuant to the Stalking Horse Purchase Agreement and
the AVO, the Excluded Claims and Liabilities are expected to be
transferred to residual entities to be incorporated by Trichome,
TJAC, MYM and MYMB, as applicable.
The Stalking Horse Purchase Agreement constitutes a related
party transaction as the Purchaser is an entity controlled by
Marc Lustig, who is a director of
Trichome and the Executive Chairman of the board of directors of
the Company. The Company expects to rely on Sections 5.5(f) and
5.7(1)(d) of MI 61-101 for exemptions from the requirements to
obtain a formal valuation and minority shareholder approval,
respectively, because the transaction will be completed as part of
the CCAA proceedings pursuant to an order of the Court, provided
that the Court is advised of the requirements under MI 61-101, and
the court does not require compliance with Section 5.4 of MI
61-101.
About IM Cannabis Corp.
IMC (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 commenced exiting 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 IMC ecosystem operates in Israel through its commercial relationship
with Focus Medical Herbs Ltd. ("Focus Medical"), 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 centers, and logistical hubs 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. Until recently, the
Company also actively operated in Canada through Trichome and its wholly-owned
subsidiaries TJAC and MYM, where it cultivated, processed,
packaged, and sold premium and ultra-premium cannabis at its own
facilities under the WAGNERS and Highland Grow brands for the
adult-use market in Canada. The
Company's Canadian operation continues to export premium and
ultra-premium medical cannabis to Israel. The Company is exiting operations in
Canada and considers these
operations discontinued. For more information, please visit
www.imcannabis.com.
Forward-Looking
Statements
This press release contains forward-looking information or
forward-looking statements under applicable Canadian and U.S.
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 regarding, the size and terms of the
offerings, the closings of the offerings and the anticipated use of
net proceeds from the offerings, the expected participation by
insiders in the offerings, the exemption from formal valuation and
minority shareholder approval requirements under MI 61-101, and
additional developments with respect to the Trichome insolvency
proceedings.
Forward-looking statements are based on assumptions that may
prove to be incorrect, including but not limited, the anticipated
increase in demand for medical and adult-use recreational cannabis
in the markets in which the Company operates; the Company's
satisfaction of international demand for its products; the
Company's ability to implement its growth strategies and leverage
synergies of acquisitions; the Company's ability to reach patients
through e-commerce and brick and mortar retail operations; the
development and introduction of new products; the ability to import
and the supply of premium and indoor grown cannabis products from
the Company's Canadian subsidiaries and third-party suppliers and
partners; the changes and trends in the cannabis industry; the
Company's ability to maintain and renew or obtain required
licenses; the ability to maintain cost-efficiencies and network of
suppliers to maintain purchasing capabilities; the effectiveness of
its products for medical cannabis patients and recreational
consumers; future cannabis pricing and input costs; cannabis
production yields; and the Company's ability to market its brands
and services successfully to its anticipated customers and medical
cannabis patients.
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
ability of the Company to close the offerings; general business
risk and liability, including claims or complaints in the normal
course of business; any failure of the Company to maintain "de
facto" control over Focus Medical in accordance with IFRS 10;
potential limitations on stockholdings of the Company in connection
with its subsidiaries' engagement in the Israeli medical cannabis
market; the ability and/or need to obtain additional financing for
continued operations on terms acceptable to the Company; 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 Canadian Securities Exchange and the
NASDAQ Capital Market; any unexpected failure to maintain in good
standing or renew its licenses; the ability of the Company to
integrate each of its acquisitions into the Company's operations
and realize the anticipated benefits and synergies of each such
transaction and the timing thereof and the focus of management on
such integration; any potential undisclosed liabilities of entities
acquired by the Company that were unidentified during the due
diligence process; the interpretation of Company's acquisitions of
companies or assets by tax authorities or regulatory bodies,
including but not limited to the change of control of licensed
entities; the ability of the Company and Focus Medical to deliver
on their sales commitments or growth objectives; the reliance of
the Company and Focus Medical (collectively, the "Group") on
third-party supply agreements and its ability to enter into
additional 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;
competition; reliance on key personnel; the Company's ability to
continue as a going concern; the risk of defaulting on existing
debt and war and civil conflict in Eastern Europe and the Middle East.
Please see the other risks, uncertainties and factors set out
under the heading "Risk Factors" in the Company's management's
discussion and analysis dated November
14th, 2022 and annual information form dated
March 31st, 2022 filed
with the Canadian securities regulators and which are available on
the Company's issuer profile on SEDAR
at www.sedar.com and on EDGAR at www.sec.gov. 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.
SOURCE IM Cannabis Corp.