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    IMCC   CA44969Q3070

IM CANNABIS CORP.

(IMCC)
  Report
Delayed CANADIAN NATIONAL STOCK EXCHANGE  -  03:47:10 2023-01-27 pm EST
1.750 CAD    0.00%
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IM Cannabis : Investor Presentation – Q1 2022

01/10/2022 | 03:38am EST

AN INTERNATIONAL CANNABIS

COMPANY

PURVEYOR OF PREMIUM CANNABIS GLOBALLY

-

IMC CANNABIS CORP

NASDAQ: IMCC

CSE: IMCC

JANUARY 2022

GENERAL

The information contained herein, and any other materials provided by IM Cannabis Corp.("IMC" or the "Company"), are intended solely for

discussion purposes and are not intended as, and do not constitute, an offer to sell or a solicitation of an offer to buy any security, and should

not be relied upon by you in evaluating the merits of investing in any securities. This investor presentation is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use is contrary to local law or regulation. This presentation contains information pertaining to the business, operations and assets of IMC. The information contained in this presentation is provided as at the date hereof and is subject to change without notice. The Company believes the information contained in this document to be reliable but makes no warranty or representation, whether express or implied, in respect of, and assumes no legal liability for, the accuracy, completeness or usefulness of any information disclosed. Any estimates, investment strategies, and views expressed in this document are based upon current market conditions, and/or data and information provided by unaffiliated third parties, and are subject to change without notice. All information and data provided in this presentation is strictly private and confidential. No person is authorized to copy or re-distribute any materials in this presentation without the express permission of IMC.

All currency values are denominated in Canadian dollars unless otherwise specified.

MARKET AND INDUSTRY DATA

This presentation includes market and industry data and forecasts that were obtained from third-party sources, industry publications and publicly available information. Third-party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of included information. Although we believe it to be reliable, we have not independently verified any of the data from third-party sources referred to in this presentation, or analyzed or

verified the underlying studies or surveys relied upon or referred to by such sources, or ascertained the underlying economic assumptions

relied upon by such sources.

FORWARD-LOOKING STATEMENTS

This investor presentation contains forward-looking statements within the meaning of applicable Canadian securities laws. 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. The forward-looking statements in this investor presentation include, without limiting the foregoing, statements relating to the Company's projected revenues, profitability and supply capacity, existing and anticipated licenses and the Company's strategic business and expansion plans, including the strategic rationale for the acquisition of Trichome Financial Corp. (the "Trichome Transaction"), the anticipated benefits of the Trichome Transaction, including corporate, operational and financial benefits and the timing thereof, achieving consolidated positive adjusted EBITDA in 2021 and continued growth, both organically and through acquisitions in Israel, Europe and North

America. Forward-looking information is based on assumptions that may prove to be incorrect, including but not limited to the execution

of the Company's business plan, the continued growth of the medical cannabis market in the countries in which the Company operates or intends to operate, the Company maintaining "de facto control" over Focus Medical Herbs Ltd. ("Focus Medical") in accordance with IFRS 10, Focus Medical maintaining its existing Israeli medical cannabis propagation and cultivation licenses and the expected decriminalization and/or legalization of recreational cannabis in Israel. The Company considers these assumptions to be reasonable in the circumstances. However, forward-looking information is subject to business and economic risks and uncertainties and other factors that could cause actual results of operations to differ materially from those expressed or implied in the forward-looking information. Such risks include, without limitation: the ability of the Company to realize the anticipated benefits of the Trichome Transaction and the timing thereof; potential undisclosed liabilities unidentified during the due diligence process for the Trichome Transaction; the interpretation of the Trichome Transaction by tax authorities; the focus of management's time and attention on the Trichome Transaction and other disruptions arising from the Trichome Transaction; a resurgence in the cases of COVID-19, which has occurred in certain locations and the possibility of which

in other locations remains high and creates ongoing uncertainty that could result in restrictions to contain the virus being re-imposed or

imposed on a more strict basis, including restrictions on movement and businesses; the extent to which COVID-19 impacts the global

economy; the success of new COVID-19 workplace policies and the ability of people to return to workplaces; the Israeli government deciding to delay or abandon the decriminalization and/or legalization of adult-use recreational cannabis; any bill relating to the decriminalization and/or legalization of adult-use recreational cannabis in Israel being rejected by Israeli parliament; any change in the political environment which would negatively affect the decriminalization and/or legalization of recreational cannabis in Israel; engaging in activities considered illegal under United States federal law; the ability of the Company to comply with applicable government regulations in a highly regulated industry; unexpected changes in governmental policies and regulations affecting the production, distribution, manufacture or use of medical cannabis in Israel, Germany or any other foreign jurisdictions in which the Company intends to operate; unexpected changes in governmental policies and regulations affecting the production, distribution, manufacture or use of adult-use recreational cannabis in Canada; any failure of the Company to maintain "de facto control" over Focus Medical in accordance with IFRS 10; the Company and Focus Medical having to rely on third party cannabis producers to supply Adjupharm GmbH ("Adjupharm") and Focus Medical with product to successfully fulfill previously

announced sales agreements and purchase commitments; the ability of Focus Medical and Adjupharm to deliver on their sales commitments;

the risk that regulatory authorities in Israel may view the Company as the deemed owner of more than 5% of Focus Medical in contravention to Israeli rules restricting the ownership of Israeli cannabis cultivators and thereby jeopardizing Focus Medical's cannabis propagation or cultivation licenses; unexpected disruptions to the operations and businesses of the Company and/or Focus Medical as a result of the COVID- 19 global pandemic or other disease outbreaks including in the event that Focus Medical were to lose its designation as an essential service in the State of Israel during the current COVID-19 outbreak; any unexpected failure of Focus Medical to renew its propagation or cultivation licenses with the Israeli Ministry of Health; any unexpected failure of Focus Medical to maintain any of its commercial facilities or land lease agreements; any unexpected failure of Adjupharm to renew its production, wholesale, narcotics handling or import/export licenses, permits, certificates or approvals; the Company's reliance on management; the lack of additional merger and acquisition opportunities; inconsistent public opinion and perception regarding the use of cannabis; perceived effects of medical cannabis products; the Company's ability to maintain or improve the brand position of the IMC brand in Israel's medical cannabis market; political instability and conflict in the Middle East;

adverse market conditions; the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses;

costs of inputs; crop failures; litigation; currency fluctuations; competition; industry consolidation; failure to meet NASDAQ Capital Market ("NASDAQ") listing requirements; failure to obtain effectiveness of a registration statement filed with the United States Securities and Exchange Commission (the "SEC"); delays in the NASDAQ or SEC review of the Company's listing application or registration of securities with the SEC, including but not limited to delays relating to COVID-19; the Company's NASDAQ listing application being unsuccessful; and loss of key management and/or employees. Please see the Company's most recent Annual Information Form, which is available under the Company's profile on SEDAR for additional related risks factors that could materially affect the Company's operations and financial results. 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. This presentation also contains financial projections. Financial projections are forward-looking statements, and actual results could vary materially from the projected results. Our financial projections were not prepared with a view toward compliance with IFRS and have not been examined, reviewed or compiled by our accountants. Our projections

represent our estimates as of the date of this presentation. Although our projections are based upon estimates and assumptions that we

believe are reasonable, they are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. Further, the degree of uncertainty inherent in our projections may significantly increase as any projections become out of date. There can be no assurance that we will achieve the results indicated. Indeed, actual results will vary from our projections, and the variations may well be material. Consequently, the fact that we have provided financial projections to you should not be regarded as a representation by anyone that they will be realized. You should not place undue reliance on these forward-looking statements. Except to the extent required by applicable laws or rules, we undertake no obligation to update or revise any forward-looking statements included in this presentation.

UNITED STATES SECURITIES LAWS

This investor presentation is not a prospectus or an offering memorandum pursuant to applicable US securities laws. The securities of IMC

have not been and will not be registered under the United States federal or state securities laws and may not be offered or sold in the United

States, or to, or for the account or benefit of, "U.S. Persons" as such term is defined in Regulation S under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), unless an exemption from registration is available.

ISRAEL BUSINESS STRUCTURE

IMC currently operates in the Israeli medical cannabis market by providing intellectual property, know-how and other related services to

licensed producers. Focus Medical, a licensed medical cannabis producer in Israel with whom IMC has exclusive commercial agreements, was the first major Israeli licensed producer to utilize IMC's intellectual property, know-how and expertise. Focus Medical is controlled by Messrs. Oren Shuster and Rafi Gabay. Neither the Company nor any of its subsidiaries currently hold, directly or indirectly, any licenses to engage in the cultivation, production, processing, distribution or sale of medical cannabis in Israel. However, under IFRS, IMC is required to consolidate

the results of Focus Medical, a licensed propagator and cultivator of medical cannabis under the current Israeli regulatory regime, in its

current financial results (see Note Regarding IMC's Accounting Practices below). Israeli regulatory authorities impose certain restrictions on the ownership of Israeli licensed producers intended to protect the integrity of the cannabis industry in Israel. These requirements preclude, among other things, any shareholder from directly or indirectly acquiring, holding or maintaining control or direction over 5% or more of the issued and outstanding share capital of an Israeli licensed producer without obtaining Ministry of Health ("MOH") approval. The ramifications of breaching this requirement without MOH approval may include, among other things, suspension or cancellation of a

medical cannabis license. Based on the foregoing, regulatory authorities in Israel may view IMC as the deemed owner of more than 5% of

Focus Medical, and as such subject to the 5% ownership restriction applicable to Israeli licensed producers. A determination of this nature could jeopardize the cultivation license held by Focus Medical and require action from IMC and its shareholders to restructure their affairs to comply with such restrictions and/or seek the MOH's approval of the current structure. Any sanctions resulting from Israeli regulatory authorities deeming IMC as the owner of more than 5% of Focus may have a material adverse effect on IMC's business, financial condition

and results of operations.

NOTE REGARDING IMC'S ACCOUNTING PRACTICES

IMC complies with IFRS 10, which applies a single consolidation model using a definition of "control" that requires an investor (as defined in IFRS 10) to consolidate an investee (as defined in IFRS 10) where: (i) the investor has power over the investee; (ii) the investor has exposure

or rights to variable returns from involvement with the investee; and (iii) the investor can use its power over the investee to affect the

amount of the investor's returns. Under IFRS 10, consolidation occurs when an investor can exercise control over an investee. Control may be achieved through voting rights or other evidence of power. Where there are no direct holdings, under IFRS 10, an investor (as defined in IFRS 10) should consider other evidence of power and ability to unilaterally direct an investee's (as defined in IFRS 10) relevant activities. In view of the exclusive commercial agreements and the guidance in IFRS 10, notwithstanding that IMC has no direct or indirect shareholding of Focus Medical, it has sufficient rights to unilaterally direct the relevant activities (a concept known as "de facto control"), mainly due to the following: (a) IMC receives economic benefits from Focus Medical (and the terms of the exclusive commercial agreements with Focus Medical cannot be changed without the approval of IMC); (b) the Company has an option to purchase a majority voting interest in Focus Medical; (c) the CEO of the Company is a director of Focus Medical (while simultaneously a substantial shareholder of the Company); and

  1. the Company provides management and support activities to Focus Medical through its exclusive commercial agreements. Accordingly, under IFRS 10, the Company has "de facto control" over Focus Medical, and therefore consolidates the financial results of Focus Medical in the Company's financial statements.

NON-IFRS FINANCIAL MEASURES

This presentation makes reference to certain non-IFRS financial measures including "Gross Margin", "EBITDA", "Adjusted EBITDA", "net revenue" and "CAGR". These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are

therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional

information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should neither be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.

Management defines EBITDA as income earned or lost from operations, as reported, before interest, tax, depreciation and amortization.

Adjusted EBITDA is defined as EBITDA, adjusted by removing other nonrecurring or non-cash items, including the unrealized change in fair value

of biological assets, realized fair value adjustments on inventory sold in the period, share-based compensation expenses, and revaluation adjustments of financial assets and liabilities measured on a fair value basis. Management believes that Adjusted EBITDA is a useful financial metric to assess its operating performance on a cash adjusted basis before the impact of non-recurring or non-cash items. The Company defines gross margin as the difference between revenue and cost of goods sold divided by revenue (expressed as a percentage), prior to the effect of a fair value adjustment for inventory and biological assets. The Company defines Revenues, net as revenues net of excise tax, and it

defines Compound Annual Growth Rate (CAGR) as the year-over-year growth rate of a value over a specified period of time.

These non-IFRS financial measures can provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS financial measures in the evaluation of issuers. Our management also uses these non-IFRS financial measures in order to facilitate operating performance comparisons from period to period, to prepare

annual operating budgets and forecasts and to determine components of management compensation. As required by Canadian securities

laws, we reconcile these non-IFRS financial measures to the most comparable IFRS measures.

IMC: A GLOBAL PLATFORM

THE IMC VISION

PURSING AN INTEGRATED GLOBAL EXPANSION AND GROWTH STRATEGY THROUGH REGULATORY AND SUPPLY CHAIN EXPERTISE, SYNERGISTIC MULTI-MARKET BENEFITS, AND GLOBAL CONSUMER INSIGHTS

STRATEGIC REACH:

Operating in the 3 largest federally legal markets,

Israel, Germany, and Canada

STRONG FINANCIAL POSITION 30/9/2021

$34mm

$8mm

$11mm

Revenue TTM

Gross Profit TTM1

Total Cash, $11mm net cash

1. Before fair value adjustments

VERTICALLY INTEGRATED:

Operating throughout the entire cannabis value chain

Diversified sources of high quality cultivation & relevant and forward - looking product offerings, including premium and super - premium offerings

ALIGNED

Founders, board, and management own ~28% of common shares

IMCANNABIS ATAGLANCE

IMC IS THE ONLY MULTI - COUNTRY OPERATOR WITH OPERATIONS IN

CANADA, GERMANY& ISRAEL

CANADA

  • Premium, indoor-grown capacity of ~7,000 kgs per year
  • Facilities in Ontario, Quebec and Nova Scotia
  • WAGNERS premium brand, indoor cultivation
  • Highland Grow super premium craft product, indoor cultivation
  • Growth through increased cultivation, product launches and further share gains

GERMANY

  • EU-GMPcertified licensed distributor
  • Agreements in place with European supply and distribution partners
  • Commenced IMC brand sales into Europe in Q4 2020
  • Launch of WAGNERS in 2022
  • Entry point to broader EU market

ISRAEL

  • Leading medical brand with 10+ year track record in Israeli market
  • Distribution agreements with largest pharmacies in Israel
  • Export to Europe of IMC branded products
  • Rapid market growth expected to continue with ongoing regulatory liberalization

Disclaimer

IM Cannabis Corp. published this content on 09 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 January 2022 08:37:03 UTC.


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