IM Cannabis Corp. just closed a US$225,000 convertible note deal on July 1, 2026, the latest in a growing line of debt raises this year. The Nasdaq-listed medical cannabis company cannot repay this debt in cash and will settle it entirely through new shares. With a Nasdaq compliance deadline set for October 6, the full terms of this deal deserve a very close look.
Breaking Down the July Note Deal
IM Cannabis signed a note purchase agreement with an unnamed institutional investor on July 1, 2026. The note carries a principal of US$225,000 with a 10% original issuance discount. That means the lender effectively paid about US$202,500 for it, collecting the extra value through the conversion mechanics.
The note charges interest at 8% per year. If the company defaults, that rate automatically rises to 14%.
No cash repayment is possible under this deal.
The company’s only path to settling this debt is by issuing common shares to the lender upon conversion. Every share issued to cover this note will dilute existing shareholders proportionately.
Here are the core terms of the July 2026 note at a glance:
- Principal amount: US$225,000
- Original issuance discount: 10%
- Annual interest rate: 8% (rising to 14% on default)
- Repayment method: Common shares only, no cash option
- Beneficial ownership cap: 4.99%
How the Conversion Price Actually Works
The conversion price is not a straightforward fixed number. It gets set at whichever is lower between a fixed price of US$0.152 per share or 90% of the lowest daily volume-weighted average price across the 20 consecutive trading days before the conversion date. A floor price of US$0.0303 sets the absolute lowest point the conversion price can reach.
This type of variable, market-linked pricing is built to protect the investor, not existing shareholders. As the stock price drops, the lender converts at a lower price and receives more shares in return, adding further pressure on an already struggling stock.
The 4.99% beneficial ownership cap is a standard safeguard against rapid accumulation. It stops the lender from converting so aggressively that they end up controlling more than 4.99% of the company at any single point in time.
The Warrants and What Investors Get
Alongside the convertible note, IMC issued a warrant giving the lender the right to buy up to 1,483,386 common shares. The exercise price is set at C$0.22 per share.
The warrants became active immediately on July 1, 2026, and will remain valid for five full years, expiring on July 1, 2031.
A notable shift worth watching: the June 2026 note warrants covered 781,250 shares at C$0.40 each. This July deal grants 1,483,386 shares at just C$0.22. More shares at a lower price tells the story of a stock under real pressure over the past month alone.
That five-year window gives the lender a long runway to watch before deciding. If IMC’s share price recovers, the lender exercises and profits from the upside. If the stock keeps sliding, the warrants simply expire with no obligation on either side.
IMC has also committed to reserving enough common shares to cover all future conversions and warrant exercises. The company must file a resale registration statement on Form F-3 with the U.S. Securities and Exchange Commission and work to get it approved within the agreed timeframes.
A Year of Small Raises and One Big Deadline
This July deal is not a one-off move. IMC has been running a steady stream of convertible note deals throughout 2026 to fund its day-to-day operations across Israel and Germany.
| Period | Total Raised | Notes Issued |
|---|---|---|
| January 2026 | Over US$2.17 million | Two notes |
| April to May 2026 | US$550,000 | Two notes combined |
| June 2026 | US$225,000 | One note |
| July 2026 (latest) | US$225,000 | One note |
The company’s first quarter 2026 results explain the urgency behind this fundraising pace. IMC posted revenues of C$8.7 million for the three months ended March 31, 2026, but still recorded a net loss of C$2.5 million, or C$0.38 per share. On the brighter side, general and administrative expenses fell 22% year-over-year, a sign that the company is cutting costs wherever it can.
In Israel, IMC operates through subsidiaries that import and distribute cannabis directly to medical patients. It also runs medical cannabis retail pharmacies and online delivery platforms across the country. In Germany, the company works through its subsidiary Adjupharm GmbH, supplying medical cannabis products to pharmacies for patients in need.
The most urgent pressure on IMC right now is a Nasdaq minimum bid price warning it received in April 2026. Nasdaq sent a formal notice on April 10, stating that IMCC shares had fallen below the required US$1.00 minimum bid price and giving the company until October 6, 2026 to fix the problem.
To regain compliance, IMC needs its shares to close at or above US$1.00 for at least ten consecutive business days before that October deadline. The current floor conversion price of US$0.0303 in this very note shows just how far the stock sits from that US$1.00 target. Missing the October cutoff could ultimately put the company’s Nasdaq listing at risk.
IM Cannabis Corp. is doing what financially stretched public companies often do: raise what it can, when it can, through whatever structure an investor will accept. Behind every financing round is a real business serving real medical patients across Israel and Germany, people who depend on IMC staying operational and regulated. Whether the company can outrun its Nasdaq deadline while keeping its medical platforms alive is now the defining test of its 2026, and the answer will arrive sooner than most expect.
What do you think about IM Cannabis’ latest financing strategy? Is this a smart survival move or a warning sign investors should not ignore? Drop your honest thoughts in the comments below.
Maria Garcia is an award-winning author who excels in creating engaging cannabis-centric articles that captivate audiences. Her versatile writing style allows her to cover a wide range of topics within the cannabis space, from advocacy and social justice to product reviews and lifestyle features. Maria’s dedication to promoting education and awareness about cannabis shines through in her thoughtfully curated content that resonates with both seasoned enthusiasts and newcomers alike.
