Marc Lustig Increases Ownership In IM Cannabis Via L5 Capital Debt Settlement

IM Cannabis Corp. IMCC IMCC, has closed the securities for debt settlement transaction with L5 Capital Inc., a company wholly-owned and controlled by Marc Lustig, the executive chairman and a director of the company. Pursuant to the debt settlement, the company settled outstanding indebtedness of CA$838,776 (approximately $615,615) through issuing 492,492 units at a price of $1.25 per unit. Each unit consists of one common share of the company and one common share purchase warrant. Each warrant entitles L5 Capital to purchase one additional common share at an exercise price of $1.50 per common share for a period of 36 months from the date of issuance.

The debt settlement is a "related party transaction" pursuant to Multilateral Instrument 61-101 – Protection of minority security holders in special transactions by virtue of L5 Capital being wholly-owned and controlled by an insider of the company.

Early Warning

L5 Capital, a company controlled by Marc Lustig, acquired the 492,492 common shares and 492,492 warrants issued pursuant to the debt settlement.

Immediately prior to the acquisition, the acquirer beneficially owned or controlled 433,558 common shares, representing approximately 3.37% of the company's issued and outstanding common shares on a non-diluted basis. As a result of the acquisition, the acquirer now beneficially owns or controls an aggregate of 926,050 common shares, representing approximately an additional 6.94% of the company's issued and outstanding common shares on a non-diluted basis.

Immediately prior to the acquisition, the acquirer beneficially owned or controlled 208,868 securities convertible into common shares, representing approximately an additional 1.60% of the company's issued and outstanding common shares on a partially diluted basis. As a result of the acquisition, the acquirer now beneficially owns or controls an aggregate of 701,360 securities convertible into common shares, representing approximately an additional 5.00% of the company's issued and outstanding common shares on a partially diluted basis.

If the acquirer were to exercise his securities convertible or exercisable for common shares, including the warrants acquired pursuant to the acquisition, they would own or control an aggregate of 1.6 million common shares, representing 11.59% of the issued and outstanding common shares on a partially diluted basis.

As a result of the debt settlement, the acquirer now owns more than 10% of the company's issued and outstanding common shares on a partially diluted basis, which triggered the requirement to file an early warning report under applicable Canadian securities legislation.

Photo by Jeff W on Unsplash

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