IM Cannabis Corp (IMCC) Prices Offering of Common Shares, Warrants

May 5, 2021 9:22 AM EDT

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IM Cannabis Corp. ("IMC" or the "Company") (CSE: IMCC) (NASDAQ: IMCC), a multi-country operator ("MCO") in the medical and adult-use recreational cannabis sector with operations in Israel, Germany and Canada, announces that is has entered into a best-efforts agency agreement (the "Agency Agreement") in connection with its previously announced overnight marketed offering (the "Offering") of common shares of the Company (each an "Offered Share") and common shares purchase warrants (each a "Warrant"). In connection with the Offering, IMC has also entered into definitive securities purchase agreements with certain institutional investors in the United States on a registered direct basis. The Offering is for up to 6,086,956 Offered Shares at a price of US$5.75 per Offered Share and, for no additional consideration, up to 3,043,478 Warrants. Each Warrant will entitle the holder to purchase one common share of the Company at an exercise price of US$7.20 for term of 5 years from the date of closing of the Offering (the "Closing Date"). The gross proceeds to the Company from the Offering, before deducting the agency fees and other estimated Offering expenses, are expected to be approximately US$35,000,000. In addition, the Company has granted the agents a 30-day over-allotment option to purchase up to an additional 913,044 Offered Shares (each an "Over-Allotment Share") and 465,522 Warrants on the same terms and conditions. The Offering is expected to close on or about May 7, 2021, subject to customary closing conditions.

A.G.P./Alliance Global Partners and Roth Capital Partners have agreed to act as co-lead agents for the proposed Offering in connection with offers and sales in the United States. Roth Canada, ULC will act as the sole agent in Canada pursuant to the Agency Agreement. The securities offered under the Offering will be issued and sold in the United States and in the provinces of British Columbia, Ontario and Alberta in Canada in accordance with applicable securities laws. BMO Nesbitt Burns Inc. is acting as part of the selling group relating to the Offering in Canada.

The Company intends to use the net proceeds of the Offering for: (i) supporting growth initiatives in core markets of Israel, Germany and Canada; (ii) additional strategic mergers and acquisitions opportunities; and (iii) general working capital purposes.

The Offering will be conducted pursuant to the Company's effective shelf registration statement on Form F-10 (File No. 333-254255) (the "Registration Statement") filed with the U.S. Securities and Exchange Commission (the "SEC") and a corresponding Canadian base shelf prospectus (the "Shelf Prospectus") filed with the securities regulatory authority in each of the provinces and territories of Canada. The Company has filed a preliminary prospectus supplement (the "Preliminary Prospectus Supplement") and will file a final prospectus supplement with Canadian regulatory authorities and the SEC in connection with the Offering.

IMC has also agreed, subject to certain limited exceptions, not to sell any common shares of the Company or any securities convertible into or exchangeable for common shares for a period of [60] days from the Closing of the Offering.

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