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Body and Mind Inc
Symbol BAMM
Shares Issued 101,698,593
Close 2021-07-20 C$ 0.47
Recent Sedar Documents

Body and Mind closes $11.1M (U.S.) debt financing

2021-07-20 11:33 ET - News Release

Mr. Michael Mills reports

BODY AND MIND CLOSES US$11.1 MILLION DEBT FINANCING

Body and Mind Inc. (BaM) has closed an $11.1-million (U.S.) debt financing with related entities to FocusGrowth Asset Management LP (FGAM).

Under the terms of the loan, the company can immediately draw the initial term loan of $6.67-million (U.S.) of which $6-million (U.S.) in funds is advanced to the company and the company can draw on the delayed draw term loan of $4.44-million (U.S.) prior to Dec. 31, 2021, of which $4-million (U.S.) in funds will be advanced to the company. The loan matures in four years and bears interest at a rate of 13 per cent per annum payable on the first day of each month hereafter. There are fees, financial covenants and prepayment fees associated with the loan, as well as a security agreement and other related agreements. As part of the terms of the loan, the company has issued an aggregate of eight million common stock purchase warrants to FGAM, of which 4.8 million warrants will entitle the holder to acquire shares of common stock at an exercise price of 40 U.S. cents per warrant shares until July 19, 2025, and 3.2 million warrants will be held in escrow by the company and released to FGAM at the time the company draws on the delayed draw term loan, or cancelled if the company does not draw on the delayed draw term loan, which will entitle the holder to acquire a warrant share at an exercise price of 45 U.S. cents per warrant share until July 19, 2025. The material terms of the loan will be described in a current report on Form 8-K to be filed by the company on or about July 23, 2021.

The proceeds from the loan will be used to (a) finance capital expenditures for existing and future projects, and (b) provide the necessary capital to help finance the company's growing pipeline of future growth opportunities.

"Over the last several quarters, we have demonstrated significant growth in revenue, EBITDA and our asset base -- including record financial results in our most recently reported quarter -- by focusing on operations and opportunities in the rapidly growing U.S. cannabis space," said Michael Mills, chief executive officer of Body and Mind. "This financing allows the company to advance growth initiatives and grow revenues through development projects, acquisitions, brand expansion and licence applications. We look forward to working with the FocusGrowth team who have significant industry experience and deep cannabis domain knowledge."

"These funds are perfectly timed to advance our 100-per-cent-owned California manufacturing facility that received local approval this past June," said Trip Hoffmann, chief operating officer of Body and Mind. "Our growing pipeline of opportunities remains robust, and this financing will help us to scale within the jurisdictions where we currently operate as well as pursue strategic opportunities to expand into new regions."

"FocusGrowth is excited to be a financing partner of Body and Mind as the company continues to grow, expand its multistate footprint and drive value creation for all stakeholders," said John Lykouretzos, chief executive officer of FGAM.

About Body and Mind Inc.

BaM is an operations focused multistate operator investing in high-quality medical and recreational cannabis cultivation, production and retail. Its wholly owned Nevada subsidiary was awarded one of the first medical marijuana cultivation licences, and holds cultivation and production licences. BaM products include dried flower, edibles, oils and extracts, as well as GPEN Gio cartridges. BaM cannabis strains have won numerous awards, including the 2019 Las Vegas Weekly Bud Bracket, Las Vegas Hempfest Cup 2016, High Times Top Ten, the NorCal Secret Cup and the Emerald Cup.

BaM continues to expand operations in Nevada, California, Arkansas and Ohio, and is dedicated to increasing shareholder value by focusing time and resources on improving operational efficiencies, facility expansions, state licensing opportunities, as well as mergers and acquisitions.

We seek Safe Harbor.

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