Mr. Robert Hasman reports
BODY AND MIND INC. ANNOUNCES RETAIL ACQUISITION IN OHIO, FINANCING, AND UPDATE
Nevada Medical Group LLC, a wholly owned subsidiary of Body and Mind Inc., has entered into a definitive agreement whereby NMG Nevada will acquire 100-per-cent ownership of NMG Ohio LLC. NMG Nevada, which previously held a 30-per-cent interest in NMG Ohio, will purchase the remaining 70-per-cent interest for fair value consideration of $3.15-million (U.S.). NMG Ohio owns a dispensary in Loraine county, Elyria, and a production licence.
The consideration will be settled equally in cash and in common shares in the capital of the company on the following basis.
$1,181,250 (U.S.) to be paid on execution of the definitive agreement;
- $393,750 (U.S.) to be paid within 10 days of closing the transaction, to be determined pending regulatory approval.
Common share issuances
2,380,398 common shares to be issued on the effective date;
793,466 common shares to be issued within 10 days of closing the transaction, to be determined pending regulatory approval.
The common shares were valued using Bank of Canada's Jan. 29, 2019, U.S.-dollar/Canadian-dollar exchange rate of 1.33 and a price of 66 Canadian cents per common share.
Two of the company's directors have a financial interest in NMG Ohio. The two applicable directors will receive aggregate net proceeds of $461,251 (U.S.) and 929,488 common shares, 75 per cent of which to be paid and issued on the effective date and 25 per cent within 10 days of closing the transaction to be determined pending regulatory approval. Both directors abstained from discussions and voting in respect of the transaction.
Concurrent with the transaction, Australis Capital Inc. and the company have entered into an investment agreement pursuant to which australis purchased 1,768,545 common shares. Pursuant to a prior investment agreement between Australis and the company, the company granted Australis anti-dilution participation rights which included discount rates as permitted by the Canadian Securities Exchange. Australis purchased the 1,768,545 common shares at a price of 58.5 Canadian cents per common share for an aggregate purchase price of $777,894 (U.S.).
The $777,894 (U.S.) investment by Australis will be used by the company for the purchase of the 70-per-cent ownership interest of NMG Ohio and will allow Australis to maintain its 35.783-per-cent ownership interest in the company. The financing remains subject to the approval of regulators.
Robert Hasman, director of the company, commented: "Revenue consolidation of our Ohio platform is critical to BaM's growth and we are delighted to have executed upon this accretive transaction. We are now positioned to evaluate tie-on acquisitions in Ohio and across our multistate footprint. We would like to thank Australis for their continued support, both financially and as advisers to the company."
NMG Ohio has completed construction of its dispensary, the Clubhouse, in Elyria, Ohio, and is awaiting final inspections which are scheduled to occur on or around Feb. 12, 2019.
"Our team in Ohio brings years of dispensary experience and is eager to educate medical patients in the emerging Ohio medical cannabis market," stated Robert Hasman, director the company. "We are extremely pleased with the design and build out of the Clubhouse dispensary and look forward to serving our patrons upon receiving final approval. Images of the dispensary, media links and related information are available on the BaM website."
About Body and Mind Inc.
Body and Mind is a publicly traded company investing in high-quality medical and recreational cannabis cultivation, production and retail. The company's wholly owned Nevada subsidiary was awarded one of the first medical marijuana cultivation licences and holds cultivation and production licences.
About Australis Capital
Australis Capital identifies and invests in the cannabis industry predominantly in the United States, a highly regulated, fragmented, rapidly expanding and evolving industry. Investments may include and are not limited to equity, debt or other securities of both public and private companies, financings in exchange for royalties or other distribution streams, and control stake acquisitions. Australis Capital adheres to stringent investment criteria and will focus on significant near- and midterm high-quality opportunities with strong return potentials while maintaining a steadfast commitment to governance and community. Australis Capital's board and management team have material experience with, and knowledge of, the cannabis space in the U.S., extensive backgrounds in highly-regulated industries, adherence to stringent regulatory compliance, public company, and operational expertise.
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