IM Cannabis Corp. (NASDAQ: IMCC) carries a dilution risk score of 9 out of 10 — a grade driven almost entirely by a single financing relationship that, by contract, can only be settled in stock.
The company's shares outstanding sit at approximately 603,922 on a post-split basis after a 1-for-30 reverse split executed on August 27, 2026. Its tradeable public float — the portion of shares available to outside investors — is estimated at roughly 485,324. That figure is about six times larger than the ~77,895 number still displayed by major data services, which have not yet absorbed the hundreds of thousands of shares created through convertible-note conversions since early 2026.
The conversion machine
Three live promissory notes issued in April, May, and June 2026 — totaling US$775,000 in principal plus roughly US$93,000 in accrued interest — sit with a single holder: Tel Aviv-based L.I.A. Pure Capital Ltd, controlled by Kfir Silberman. Each note converts at the lower of a fixed price or 90% of the lowest daily VWAP over the preceding 20 trading days — meaning the conversion price resets downward automatically as the stock weakens.
The critical clause: these notes are expressly not repayable in cash. Every dollar of principal and interest must be settled in newly issued shares. Conversion is not optional. It is the only exit.
Roughly 272,527 post-split shares remain unissued under an already-effective F-3 resale registration — a type of shelf filing that lets the holder sell registered shares into the open market immediately upon issuance with no further company approval. That unissued block alone equals about 56% of the current float.
How the float got here
Between late December 2025 and the August 2026 reverse split, pre-split shares outstanding grew from roughly 5.9 million to an implied 18.1 million — a 207% increase in eight months. The source was a single lender converting a rolling series of notes. That is not theoretical overhang. It is realized dilution.
The June 2026 F-3 registered 17,276,931 pre-split shares (approximately 575,898 post-split) for resale by L.I.A. Pure Capital. That registration covered 192% of the shares then outstanding — nearly two entire companies' worth of stock queued for one holder.
A 4.99% cap that doesn't cap
L.I.A. Pure Capital is subject to a 4.99% beneficial ownership blocker, meaning it cannot hold more than 4.99% of outstanding shares at any moment. But the blocker merely paces the flow. The holder converts a tranche, sells it into the float, then converts again. The reported ownership stays at 4.99% while cumulative issuance grows without limit.
The broader pattern
This is IMCC's fourth reverse split in five years — 1-for-4 (2021), 1-for-10 (2022), 1-for-6 (2024), and 1-for-30 (2026). The cumulative compression ratio: 1-for-7,200. Each split resets the nominal share count, and each has been followed by renewed conversions that rebuild it.
Five separate notes have gone to the same lender in six months, each carrying a 10% original issue discount — meaning L.I.A. Pure Capital pays 90 cents on each dollar of face value — plus a warrant kicker struck progressively lower with each tranche (from C$3.45 down to C$0.36 pre-split). Affiliated entities Xylo Technologies Ltd. and Pure Equity Ltd., both linked to Silberman, hold additional warrants and collected a US$260,000 advisory fee on the 2025 private placement.
Warrant overhang totals roughly 181,209 post-split shares, but with strikes ranging from C$10.80 to C$103.50 post-split, they sit 3 to 30 times above recent levels. They are structurally inert for now. The 6,667 perpetual pre-funded warrants at C$0.0003 are the exception — they are economically indistinguishable from common stock and exercisable at any time.
The June 2026 F-3 itself contains at least six internal contradictions in share counts and conversion terms, all of which skew toward understating share totals in the document's summary sections — making independent float modeling inherently imprecise.