IM Cannabis Corp. ("IMC" or the "Company") (NASDAQ:IMCC), today announced that, further to its press release dated June 18, 2026, it has entered into a definitive share purchase agreement dated August 16, 2026 (the "Share Purchase Agreement") with Slil.com Holding Ltd. ("Slil") and I.M.C. Holdings Ltd. ("IMC Holdings") pursuant to which the Company has agreed to sell to Slil all of the issued and outstanding shares of IMC Holdings (the "Transaction").

Prior to closing, IMC Holdings will complete a pre-closing reorganization pursuant to which the Company's Israeli operations will be transferred out of IMC Holdings and retained by the Company. Following completion of the pre-closing reorganization, IMC Holdings is expected to hold, as its material assets, the equity interests in Adjupharm GmbH, Xinteza API Ltd. and Shiran Societe Anonyme (together, the "Target Subsidiaries"), together with certain liabilities of IMC Holdings and/or its subsidiaries that will remain with IMC Holdings following closing of the Transaction and that are assumed or retained by Slil as part of the Transaction (the "Retained Liabilities").

The Company expects the Transaction to improve its shareholders' equity, reduce liabilities associated with IMC Holdings, improve working capital and streamline its corporate structure. Following completion of the Transaction, the Company expects to focus its resources on its retained Israeli medical cannabis operations while continuing to evaluate additional opportunities. Based on management's current pro forma analysis, the Company expects the Transaction to result in an improvement of approximately C$3 million in shareholders' equity.

The consideration for the Transaction consists of prior aggregate C$3,000,000 advance payments made by Slil, and an affiliate of Slil, as applicable, to the Company, receipt of which is acknowledged under the Share Purchase Agreement, together with Slil's assumption of the Retained Liabilities, which shall not materially exceed C$9,400,000 in the aggregate unless otherwise adjusted by mutual agreement of the parties. No securities of IMCC or IMC Holdings are being issued or exchanged as part of the Transaction.

Closing is subject to customary conditions, including completion of the pre-closing reorganization, receipt of a valid tax certificate from the Israel Tax Authority, and other required consents and approvals. The outside date for closing is September 30, 2026.

Upon closing, IMCC will retain its core Israeli medical cannabis operations and related subsidiaries.

In connection with the Transaction, the board of directors of the Company (the "Board") has commissioned (x) a special committee of the Board comprised solely of independent directors (the "Special Committee") to review and evaluate the Transaction; and (y) Beta Finance T.Y.S Ltd., a leading financial consulting company in Israel and an arm's length independent third-party, to prepare a report to assist with determining the fairness of the Transaction.