THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN
CANADA ONLY AND IS NOT INTENDED
FOR DISTRIBUTION TO UNITED STATES
NEWSWIRE SERVICES OR DISSEMINATION IN THE
UNITED STATES
TORONTO and GLIL YAM, Israel,
May 27,
2025 /PRNewswire/ -- IM Cannabis Corp. ("IM
Cannabis" or the "Company") (NASDAQ: IMCC) (CSE: IMCC),
a leading medical cannabis company with operations in Israel and Germany, is pleased to announce the following
corporate updates.
Meeting Results
Further to its press releases dated Aprill 11, 2025 (the
"April 11 Release") and
May 7, 2025 (the "May 7 Release"), the Company is pleased to
announce results of its annual general and special meeting, held on
Friday, May 23, 2025 (the
"Meeting"). Capitalized terms not otherwise defined in this
section have the meanings attributed to them in the April 11 Release.
At the Meeting, there were 60 shareholders represented in person
or by proxy holding 1,414,501 Common Shares, representing 45.84% of
the Company's issued and outstanding Common Shares as at the record
date for the Meeting. Shareholders voted in favour of each
resolution put forth at the Meeting.
Each nominee listed in the Company's management information
circular dated March 31, 2025 (the
"Circular"), was elected as director of the Company, the
results of which were as follows:
|
Nominee
|
Votes
For:
|
Votes
Withheld:
|
|
Number
|
%
|
Number
|
%
|
|
Oren Shuster
|
1,061,331
|
99.61 %
|
4,197
|
0.39 %
|
|
Moti Marcus
|
953,371
|
89.47 %
|
112,157
|
10.53 %
|
|
Einat
Zakariya
|
947,600
|
88.93 %
|
117,928
|
11.07 %
|
|
Brian
Schinderle
|
954,424
|
89.57 %
|
111,105
|
10.43 %
|
|
Shmulik
Arbel
|
1,054,377
|
98.95 %
|
11,152
|
1.05 %
|
In addition, at the Meeting, shareholders: (x) fixed the number
of directors of the Company at five and (y) shareholders
re-appointed Fahn Kanne & Co.
Grant Thornton Israel, a member of
Grant Thornton Global, as the Company's auditor for the ensuing
year and authorized the audit committee of the board of directors
to fix their compensation, and disinterested shareholders approved:
(a) each of Messrs. Oren Shuster and
Rafael Gabay becoming Control
Persons (as such term is defined in the policies of the CSE) of the
Company, (b) the completion of the Focus Transaction, and (c)
the ratification of the repeal and replacement of the Company's
current stock option plan and restricted share unit plan with the
adoption of the proposed equity incentive plan for the Company (the
"Equity Incentive Plan"). The results of such votes
were as follows:
|
Resolution
|
Votes
For:
|
Votes
Withheld:
|
Votes
Against:
|
|
Number
|
%
|
Number
|
%
|
Number
|
%
|
|
Fixing the Directors at
Five
|
1,409,772
|
99.67 %
|
0
|
0.00 %
|
4,728
|
0.33 %
|
|
Reappointment of
Auditor
|
1,386,077
|
97.99 %
|
28,421
|
2.01 %
|
0
|
0.00 %
|
|
Approval of Control
Persons(1)
|
339,303
|
96.17 %
|
0
|
0.00 %
|
13,496
|
3.83 %
|
|
Approval of the Focus
Transaction(2)
|
342,292
|
97.02 %
|
0
|
0.00 %
|
10,507
|
2.98 %
|
|
Ratification of the
Equity Incentive Plan(3)
|
175,223
|
59.55 %
|
0
|
0.00 %
|
119,026
|
40.45 %
|
|
Notes:
1. Approved by a
majority of disinterested shareholders. 712,730 Common Shares held
by interested parties were ineligible to vote.
2. Approved by a
majority of disinterested shareholders. 712,730 Common Shares held
by interested parties were ineligible to vote.
3. Approved by a
majority of disinterested shareholders. 779,279 Common Shares held
by interested parties were ineligible to vote.
|
For additional information on each matter put forth at the
Meeting, please refer to the Circular available, a copy of which is
available under the Company's profile on SEDAR+ at
www.sedarplus.ca.
Closing of Focus Transaction and concurrent Debt
Settlement
Further to the April 11 Release
and May 7 Release, the Company is
pleased to announce the closing of the Focus Transaction, effective
May 26, 2025, following receipt of
disinterested shareholder approval at the Meeting. Capitalized
terms not otherwise defined in this section have the meanings
attributed to them in the April 11
Release.
In connection with the closing of the Focus Transaction, to
preserve the Company's cash, the Company, IMC Holdings and Ewave
agreed to settle (the "Debt Settlement") the Focus Purchase
Price of NIS 818,740, approximately,
C$313,970.17, based on an exchange
rate of NIS 1 = C$0.3835 as at
May 23, 2025, as calculated on the
website www.boi.org.il, into an aggregate of 128,818 Common Shares
at a deemed price of C$2.44 per
Common Share, equal to the ten-day volume weighted average price of
the Common Shares on the CSE ending on the date the Company
received disinterested shareholders' approval to complete the Focus
Transaction.
The Common Shares issued in consideration for the Focus
Transaction 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 United States Securities Act of
1933, as amended.
Related Party Transaction
The Focus Transaction constituted a "related party transaction",
as such term is defined in MI 61-101, due to the involvement of
Ewave, a privately-held entity jointly owned by Messrs.
Oren Shuster and Rafael Gabay, related parties to the Company,
and as such would have required the Company to receive minority
shareholder approval for, and obtain a formal valuation for the
subject matter of, the transaction in accordance with MI 61-101,
prior to the completion of such transaction, unless the Company was
able to rely on exemptions from the formal valuation and minority
shareholder approval requirements of MI 61-101. Notwithstanding the
fact that the Focus Transaction was exempt from the formal
valuation and minority shareholder approval requirements of MI
61-101 pursuant to sections 5.5(a) and 5.7(1)(a) of MI 61- 101, as
neither the fair market value of the subject matter of the
transaction, nor the consideration payable under the transaction,
exceeded 25% of the Company's market capitalization insofar as it
involves interested parties, the Board commissioned an arm's length
third-party to prepare a report to determine the Focus Purchase
Price and the Company sought and obtained disinterested
shareholders' approval of the Focus Transaction at the Meeting as a
means of good governance.
Further details will be included in a material change report to
be filed by the Company. The Company did not file a material change
report more than 21 days before the closing date of the Focus
Transaction and Debt Settlement as the Company sought disinterested
shareholders' approval to complete the Focus Transaction as a means
of good governance and was not certain that it would be received,
and upon receipt, the parties wished to close immediately. In the
Company's view, the shorter period was necessary to permit the
Company to close the Focus Transaction in a timeframe consistent
with usual market practice for transactions of this nature and was
reasonable and necessary to improve the Company's financial
position.
Exercise of Pre-Funded Warrants
Further to the Company's press release dated November 12, 2024 (the "November 2024 Release"), the Company
announces that, effective May 26,
2025, following disinterested shareholder approval for Mr.
Shuster to become a Control Person of the Company, Mr. Shuster has
exercised an aggregate 152,701 Pre-Funded Warrants. Capitalized
terms not otherwise defined in this section have the meanings
attributed to them in the November
2024 Release. Each Pre-Funded Warrant was issued at a deemed
price of C$2.88 and entitled Mr.
Shuster to purchase one Settlement Share for a price of
C$0.00001 per Pre-Funded Warrant
following disinterested shareholder approval for Mr. Shuster to
become a Control Person of the Company.
Closing of Secured Debenture Offering
Further to the Company's press release dated May 15, 2025, the Company is pleased to announce
that, in order to preserve its cash to support accelerated growth
in Germany, it has closed a
non-brokered private placement (the "Secured Debenture
Offering") of secured convertible debentures of the Company
(each, a "Debenture") for aggregate proceeds of C$2,301,174.70. The Debentures are being issued
to holders of debentures that matured on May
26, 2025, subject to a 10% extension fee. The Debentures
will mature on May 26, 2026, and will
not incur interest except in the event of default. The Debentures
may be converted into Common Shares at a conversion price of
C$2.61 per Common Share.
Related Party Transaction
Oren Shuster, a director, officer and Control Person of the
Company, and Rafael Gabay, an
insider of the Company, (together, the "Participating
Insiders") each participated in the Secured Debenture Offering.
Mr. Shuster subscribed for a Debenture in the principal amount of
C$260,935.40 and Mr. Gabay subscribed
for a Debenture in the principal amount of C$260,278.70.
The participation of the Participating Insiders in the Secured
Debenture Offering constituted a "related party transaction", as
such term is defined in MI 61-101 and as such would have required
the Company to receive minority shareholder approval for, and
obtain a formal valuation for the subject matter of, the
transaction in accordance with MI 61-101, prior to the completion
of such transactions, unless the Company was able to rely on
exemptions from the formal valuation and minority shareholder
approval requirements of MI 61-101. The Participating Insiders'
participation in the Secured Debenture Offering was exempt from the
formal valuation and minority shareholder approval requirements of
MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) of MI 61- 101,
as neither the fair market value of the subject matter of the
transactions, nor the consideration payable under the transactions,
exceeded 25% of the Company's market capitalization insofar as it
involves interested parties.
Further details will be included in a material change report to
be filed by the Company. The Company did not file a material change
report more than 21 days before the closing date of the Secured
Debenture Financing. In the Company's view, the shorter period was
necessary to permit the Company to close the Secured Debenture
Financing in a timeframe consistent with usual market practice for
a transaction of this nature and was reasonable and necessary to
improve the Company's financial position in a timely manner as each
of the Participating Insiders had debentures that matured and
became due on May 26, 2025.
Early Warning Disclosure
This press release is being issued in accordance with the
requirements of National Instrument 62-104 – Take-Over Bids and
Issuer Bids and National Instrument 62-103 – The Early
Warning System and Related Take-Over Bid and Insider Reporting
Issues, in connection with the Early Warning Reports (as
defined herein) which will be filed by Oren
Shuster, whose registered address is 22, Hanachal St.
Ra'anana, Israel, 4356990 and Rafael
Gabay, whose registered address is Shmerling 8, Tel Aviv, Israel 5251241, on behalf of
themselves, and their joint actor, Ewave, a privately-held entity
jointly owned by Messrs. Oren
Shuster and Rafael Gabay
(collectively, the "Acquirors") in connection with an
acquisition of securities of the Company, whose registered address
is Kibbutz Glil Yam, Central District, Israel, 4690500. Capitalized
terms not otherwise defined in this press release have the meanings
attributed to them in the November
2024 Release.
Effective May 26, 2025, (i) Mr.
Shuster acquired 152,701 Common Shares at a deemed price of
C$2.88 following the exercise of
152,701 Pre-Funded Warrants at a price of C$0.00001 per Pre-Funded Warrant, acquired a
Debenture in the principal amount of C$260,935.40 pursuant to the Secured Debenture
Offering and debentures in the principal amount of C$237,214, convertible into up to 46,512 Common
Shares at a deemed price of C$5.10
per Common Share, held by Mr. Shuster matured; (ii) Mr. Gabay
acquired a Debenture in the principal amount of C$260,278.70 pursuant to the Secured Debenture
Offering and debentures in the principal amount of C$236,617, convertible into up to 46,395 Common
Shares at a deemed price of C$5.10
per Common Share, held by Mr. Gabay matured; and (iii) Ewave, a
privately-held entity jointly owned by Messrs. Oren Shuster and Rafael
Gabay, settled debt with the Company pursuant to the Debt
Settlement, in the amount of NIS
818,740, approximately, C$313,970.17, based on an
exchange rate of NIS 1 = C$0.3835 as at May 23,
2025, as calculated on the website www.boi.org.il, and
acquired 128,818 Common Shares at a deemed price of C$2.44 per Common Share.
Immediately prior to the completion of the transactions,
Oren Shuster, along with his joint actor, Ewave, owned an
aggregate of 616,831 Common Shares, (of which 25 Common Shares were
owned by Ewave directly and 616,806 Common Shares were owned by Mr.
Shuster directly), 194,110 Warrants exercisable into Common
Shares, 152,701 Pre-Funded Warrants exercisable into Common Shares,
21,875 options exercisable into Common Shares, and debentures in
the principal amount C$237,214,
convertible into up to 46,512 Common Shares at a deemed price of
C$5.10 per Common Share, which
represented approximately 19.99% of the then Company's issued and
outstanding Common Shares on a non-diluted basis (based on
3,085,452 Common Shares issued and outstanding prior to the
completion of the transactions) and 29.48% on a partially diluted
basis if Mr. Shuster converted all of the convertible securities
owned or controlled by him.
As a result of the transactions, Mr. Shuster, along with its
joint actor, Ewave, now beneficially owns or controls an aggregate
of 898,350 Common Shares,(of which 128,843 Common Shares are owned
by Ewave directly and 769,507 Common Shares are owned by Mr.
Shuster directly), 194,110 Warrants exercisable into Common Shares,
21,875 options exercisable into Common Shares, and a Debenture in
the principal amount of C$260,935.40,
convertible into up to 99,975 Common Shares at a deemed price of
C$2.61 per Common Share, which
represents approximately 26.68% of the Company's issued and
outstanding Common Shares on a non-diluted basis (based on
3,366,971 Common Shares issued and outstanding following completion
of the transactions), and 32.97% on a partially diluted basis if
Mr. Shuster converted all of the convertible securities owned
or controlled by him.
Immediately prior to the completion of the transactions,
Rafael Gabay, along with his joint
actor, Ewave, owned an aggregate of 389,707 Common Shares,(of which
25 Common Shares were owned by Ewave directly and 389,682 Common
Shares were owned by Mr. Gabay directly), 244,637 Warrants
exercisable into Common Shares, 1,500 options exercisable into
Common Shares, and debentures in the principal amount of
C$236,617, convertible into up to
46,395 Common Shares at a deemed price of C$5.10 per Common Share, which represented
approximately 12.63% of the then Company's issued and outstanding
Common Shares on a non-diluted basis (based on 3,085,452 Common
Shares issued and outstanding prior to the completion of the
transactions) and 20.20% on a partially diluted basis if Mr. Gabay
converted all of the convertible securities owned or controlled by
him.
As a result of the transactions, Mr. Gabay, along with its joint
actor, Ewave, now beneficially owns or controls an aggregate of
518,525 Common Shares, (of which 128,843 Common Shares are owned by
Ewave directly and 389,682 Common Shares are owned by Mr. Gabay
directly), 244,637 Warrants exercisable into Common Shares, 1,500
options exercisable into Common Shares, and a Debenture in the
principal amount of C$260,278.70,
convertible into up to 99,723 Common Shares at a deemed price of
C$2.61 per Common Share, which
represents approximately 15.40% of the Company's issued and
outstanding Common Shares on a non-diluted basis (based on
3,366,971 Common Shares issued and outstanding following completion
of the transactions), and 23.28% on a partially diluted basis if
Mr. Gabay converted all of the convertible securities owned or
controlled by him.
The Acquirors acquired the above-noted securities for investment
purposes. In the future, the Acquirors will evaluate their
respective investment in the Company from time to time and may,
based on such evaluation, market conditions and other
circumstances, increase or decrease their respective shareholdings
as circumstances require through market transactions, private
agreements, or otherwise.
Since the previous early warning reports filed on November 14, 2024 by each of the Acquirors in
respect of the Company, the Acquirors' Common Share ownership
positions increased by more than 2% of the issued and outstanding
Common Shares, which triggered the requirements to file an early
warning report under applicable Canadian Securities legislation
(together, the "Early Warning Reports").
Copies of the Early Warning Reports may be found at SEDAR+ at
www.sedarplus.ca under IM Cannabis' profile. For further
information, or to obtain copies of the Early Warning Reports,
please contact the Acquirors by emailing michal.l@imcannabis.com or
calling +972 542815033.
About IM Cannabis Corp.
IM Cannabis (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 exited
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 IM Cannabis ecosystem operates in Israel through its subsidiaries, 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
center, and logistical hubs in Israel that enable the safe delivery and
quality control of IM Cannabis products throughout the entire value
chain. In Germany, the IM Cannabis
ecosystem operates through Adjupharm GmbH, where it distributes
cannabis to pharmacies for medical cannabis patients.
Company Contact:
Anna Taranko, Director Investor
& Public Relations
IM Cannabis Corp.
+49 157 80554338
a.taranko@imcannabis.de
Oren Shuster, Chief Executive
Officer
IM Cannabis Corp.
+972-77-3603504
info@imcannabis.com
Cautionary Note Regarding Forward-Looking Information
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 Company filing the material change
reports and the Acquirors filing the Early Warning Reports;
the Acquirors will evaluate their respective investment in the
Company from time to time and may, based on such evaluation, market
conditions and other circumstances, increase or decrease their
respective shareholdings as circumstances require through market
transactions, private agreements, or otherwise; and the Debentures
will mature on May 26, 2026, and will
not incur interest except in the event of default.
Forward-looking statements are based on assumptions that may
prove to be incorrect, including but not limited to: the Company's
ability to focus and resources to achieve sustainable and
profitable growth in its highest value markets; the Company's
ability to mitigate the impact of the Israel-Hamas war on the
Company; the Company's ability to take advantage of the
legalization of medicinal cannabis in Germany; the Company's ability to carry out
its stated goals, scope, and nature of operations in Germany, Israel, and other jurisdictions the
Company may operate; the Company will file the material change
reports and the will file the Early Warning Reports; the Acquirors
will have the ability to increase or decrease their respective
shareholdings as circumstances require through market transactions,
private agreements, or otherwise; and the Debentures will mature on
May 26, 2026, and will not incur
interest except in the event of default.
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 CSE and 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
Israel-Hamas war 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 not filing the material
change report and/or the Acquirors not filing the Early Warning
Reports; the Acquirors will not evaluate their respective
investment in the Company from time to time and will not increase
or decrease their respective shareholdings as circumstances require
through market transactions, private agreements, or otherwise; and
the Debentures will not mature on May 26,
2026, and will incur interest. Please see the other risks,
uncertainties and factors set out under the heading "Risk Factors"
in the Company's annual report dated March
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.
This news release does not constitute an offer to sell or a
solicitation of an offer to sell any of the securities to, or for
the account or benefit of, persons in the
United States or U.S. persons. The securities have not been
and will not be registered under the U.S. Securities Act, or any
state securities laws and may not be offered or sold to, or for the
account or benefit of, persons in the
United States or to U.S. Persons unless registered under the
U.S. Securities Act and applicable state securities laws or an
exemption from such registration is available.
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