IM Cannabis Corp. (NASDAQ:IMCC) shares fell Wednesday, reversing an earlier premarket surge after the company announced a $1.31 million registered direct offering following its non-binding deal to acquire 51% of Space Defense Innovations LLC.

The proposed acquisition would expand IM Cannabis from medical cannabis into defense technology, though no definitive agreement has been signed.

The transaction aligns with the company’s stated plan to build technology-driven businesses outside its core cannabis operations.

• IM Cannabis stock is feeling bearish pressure. What’s pressuring IMCC stock?

IM Cannabis Targets Tactical Drone Business

Space Defense Innovations, through BlueAero Group Sp. z o.o., resells BlueBird Aero Systems tactical drones. It plans to manufacture BlueBird UAS platforms in Europe after securing licenses, with manufacturing exclusivity in Poland.

The portfolio includes intelligence, surveillance and reconnaissance systems, hybrid fixed-wing VTOL platforms, loitering munitions and 3D mapping technology.

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Deal Includes Equity and Financing

IM Cannabis would fund the 51% acquisition with common shares and/or pre-funded warrants, plus a 24-month seller loan carrying 9% annual interest.

The seller loan includes warrant coverage exercisable at a 25% premium to IM Cannabis’ closing price when definitive agreements are signed.

IM Cannabis would also receive a five-year option to acquire the remaining shares at the same valuation, along with the right to appoint a majority of Space Defense Innovations’ board.

The company plans to provide a credit line of up to 2.3 million euros at closing.

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Deal Remains Subject to Further Agreements

The parties aim to sign definitive agreements within 60 days.

Completion remains subject to due diligence, definitive documentation, corporate and regulatory approvals, third-party consents and other customary conditions. The LOI is non-binding, and there is no assurance the acquisition will close.

IM Cannabis currently operates medical cannabis businesses in Israel and Germany and expects to retain its Israeli operations while selling its German business.

The company has also completed a 1-for-30 reverse stock split, providing additional context for Wednesday’s sharp move in the share price.

IM Cannabis Prices $1.31 Million Share Offering

Separately, IM Cannabis agreed to sell 655,000 shares at $2 each in a registered direct offering, raising about $1.31 million.

The offering is expected to close around Sept. 24.

The company plans to use the proceeds for working capital and general corporate purposes, including potential business opportunities.

IMCC Stock Price Activity: IM Cannabis shares were down 25.85% at $3.07 at publication on Wednesday, according to Benzinga Pro data.

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