Prior to closing, IMC Holdings completed a pre-closing reorganization pursuant to which the Company's Israeli operations were transferred out of IMC Holdings and retained by the Company. Following completion of the pre-closing reorganization, IMC Holdings held, as its only material assets, its direct or indirect equity interests in Adjupharm GmbH, Xinteza API Ltd. and Shiran Societe Anonyme (together, the "Target Subsidiaries"), together with certain liabilities that remained in IMC Holdings immediately prior to closing and continued to be obligations of IMC Holdings following Slil's acquisition of IMC Holdings (the "Retained Liabilities").

The Company expects the Transaction to improve its shareholders' equity and working capital, reduce the liabilities reflected in the Company's consolidated financial position that are associated with IMC Holdings, and streamline the Company's corporate structure. Following completion of the Transaction, the Company intends to focus its resources on its retained Israeli medical cannabis operations while continuing to evaluate additional opportunities. Based on management's current unaudited pro forma analysis, the Company expects the Transaction to result in an improvement of approximately C$3 million in shareholders' equity. The actual accounting impact of the Transaction may differ from this estimate and will be reflected in the Company's financial statements for the applicable reporting period.

The consideration for the Transaction consisted of a C$3,000,000 advance payment previously made by Slil to the Company, receipt of which is acknowledged in the Share Purchase Agreement, together with Slil's acquisition of IMC Holdings with the Retained Liabilities remaining in IMC Holdings. Under the Share Purchase Agreement, the aggregate Retained Liabilities of IMC Holdings were not to exceed C$9,400,000, subject to adjustment by mutual agreement of the parties. This amount excludes direct liabilities of the Target Subsidiaries, to which the C$9,400,000 cap does not apply. No securities of the Company or IMC Holdings were issued or exchanged as consideration in connection with the Transaction.

In connection with the Transaction, the board of directors of the Company (the "Board") established a special committee comprised solely of independent directors (the "Special Committee") to review, consider and evaluate the Transaction. The Special Committee reviewed the terms of the Transaction and recommended that the Board approve the Transaction. Oren Shuster declared his interest in the Transaction and did not participate in or vote on its approval. In addition, Beta Finance T.Y.S Ltd., an arm's-length financial consulting firm engaged by the Board, provided a financial analysis to assist the Special Committee and the Board in evaluating the Transaction.

Related Party Transaction and MI 61-101

The Transaction constituted a "related party transaction" within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101") because Slil is beneficially owned and controlled by Oren Shuster, the Company's Chief Executive Officer, a director, securityholder and debtholder.

In connection with the Transaction, the Company relied on the financial hardship exemptions from the formal valuation requirement and minority approval requirement under sections 5.5(g) and 5.7(1)(e) of MI 61-101, respectively. The Company relied on these exemptions on the basis that, among other things: (i) the Company was in serious financial difficulty; (ii) the Transaction was designed to improve the financial position of the Company; (iii) the circumstances described in section 5.5(f) of MI 61-101 were not applicable; (iv) the Board, acting in good faith, and at least two-thirds of the Company's independent directors, acting in good faith, determined that paragraphs (i) and (ii) applied and that the terms of the Transaction were reasonable in the circumstances of the Company; and (v) there was no requirement, corporate or otherwise, to hold a meeting to obtain approval of the holders of any class of affected securities. Although the Company relied on the financial hardship exemption from the formal valuation requirement under MI 61-101, the financial analysis provided by Beta Finance T.Y.S Ltd did not constitute a "formal valuation" within the meaning of MI 61-101. Further details regarding the completion of the Transaction will be provided in a material change report to be filed by the Company in accordance with applicable securities laws.