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TORONTO and GLIL YAM, Israel – IM Cannabis Corp. (NASDAQ: NASDAQ:IMCC) (CSE: IMCC), a medical cannabis company operating in Israel and Germany, has announced its plans for a non-brokered private placement offering aiming to raise up to US$1,613,000. The offering will involve the sale of approximately 625,000 units, with each unit comprising one common share and one share purchase warrant, allowing the holder to acquire an additional share at a premium.
The company's management team, including CEO Oren Shuster, will lead the offering, which is expected to close by November 11, 2024. The proceeds are designated for the repayment of a loan provided to the company's subsidiary, IMC Holdings Ltd., by A.D.I. CAR ALARMS & STEREO SYSTEMS Ltd. on October 11, 2022.
In addition to the offering, IM Cannabis has cancelled a total of 32,305 options and 142,784 share purchase warrants previously granted to board members, officers, and consultants, as these incentives were deemed no longer effective. Concurrently, the company has approved new option grants with adjusted terms to provide motivation for eligible persons.
The company has also disclosed a settlement agreement related to personal loan guarantees by CEO Shuster, which will be compensated through shares or pre-funded share purchase warrants, subject to shareholder approval and regulatory hold periods.
IM Cannabis emphasizes that this offering and the securities involved have not been registered under the U.S. Securities Act of 1933 and are not intended for distribution in the United States. The company continues to focus its efforts on the medical cannabis markets in Israel and Germany, having recently ceased operations in Canada.
This news article is based on a press release statement from IM Cannabis Corp. and contains no speculative or promotional content.
In other recent news, IM Cannabis Corp. reported a significant 50% increase in Q3 revenue over Q2 for its German subsidiary, Adjupharm GmbH, following the partial legalization of cannabis in Germany. This growth, which equates to approximately CAD$ 3.5M in Q2, is attributed to strategic initiatives and robust product demand. Additionally, the company reported a 12% year-over-year increase in revenue, reaching C$14.8 million, significantly boosted by a 129% surge in sales in Germany.
Further developments include the appointment of Shmulik Arbel, a former Deputy CEO of Leumi, to the company's board of directors. Arbel's extensive experience in strategic planning, finance, and corporate governance is expected to contribute to the company's strategic initiatives.
Analysts from Roth/MKM have reaffirmed the Buy rating for IM Cannabis, even though the company's potential is somewhat constrained by limited access to supply in the near term. The company reported a 200% increase in sales in Q2 compared to Q1 2024, following the legalization of cannabis in Germany. However, despite an 11.7% increase in revenue compared to the same quarter in the previous year, the company reported a decrease in gross profit due to inventory clearance and slow-moving stock. These are the recent developments shaping IM Cannabis Corp.'s current market standing.
InvestingPro Insights
As IM Cannabis Corp. (NASDAQ: IMCC) moves forward with its non-brokered private placement offering, investors should consider some key financial metrics and insights provided by InvestingPro. The company's market capitalization stands at a modest $4.94 million, reflecting its current position in the medical cannabis market.
InvestingPro data shows that IM Cannabis has faced challenges, with revenue declining by 8.25% over the last twelve months as of Q2 2024. However, there's a silver lining in the quarterly revenue growth of 11.68% for Q2 2024, which may indicate a potential turnaround in the company's operations.
Two relevant InvestingPro Tips highlight the company's financial situation:
1. IM Cannabis is trading at a low revenue valuation multiple, which could be of interest to value-oriented investors considering the recent offering.
2. The company's short-term obligations exceed its liquid assets, underscoring the importance of the current fundraising efforts to improve its financial position.
These insights align with the company's decision to raise capital through the private placement and settle outstanding loan guarantees. Investors should note that InvestingPro offers 5 additional tips for IMCC, providing a more comprehensive analysis of the company's financial health and market position.
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