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Body and Mind Announces Debt Financing

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Body and Mind (BMMJ) has secured a credit facility agreement with Bengal Catalyst Fund for up to US$2.3 million. The facility bears an 18% annual interest rate with a 5% original issuer discount and a 2-year maturity period. The company has also amended its existing convertible debentures, modifying the interest rate to 15% per annum. CEO Michael Mills highlighted that this financing will support development projects in Illinois and New Jersey, and mentioned a potential US$2.5 million payment expected in early 2025 from a previous Ohio dispensary sale contingency.

Body and Mind (BMMJ) ha ottenuto un accordo per una linea di credito con il Bengal Catalyst Fund fino a 2,3 milioni di dollari USA. La linea di credito prevede un tasso d'interesse annuale del 18% con uno sconto del 5% per l'emittente originale e un periodo di scadenza di 2 anni. L'azienda ha anche modificato i suoi debentures convertibili esistenti, cambiando il tasso d'interesse al 15% per anno. Il CEO Michael Mills ha sottolineato che questo finanziamento sosterrà progetti di sviluppo in Illinois e nel New Jersey, e ha menzionato un potenziale pagamento di 2,5 milioni di dollari USA previsto per all'inizio del 2025 da una precedente vendita di un dispensario in Ohio.

Body and Mind (BMMJ) ha asegurado un acuerdo de facilidad de crédito con Bengal Catalyst Fund por hasta 2,3 millones de dólares estadounidenses. Esta facilidad tiene una tasa de interés anual del 18% con un descuento del 5% para el emisor original y un periodo de vencimiento de 2 años. La empresa también ha modificado sus bonos convertibles existentes, ajustando la tasa de interés al 15% anual. El CEO Michael Mills destacó que este financiamiento apoyará proyectos de desarrollo en Illinois y Nueva Jersey, y mencionó un posible pago de 2,5 millones de dólares estadounidenses esperado a principios de 2025 de una contingencia de venta de dispensarios en Ohio.

Body and Mind (BMMJ)는 Bengal Catalyst Fund와 최대 230만 달러의 신용 시설 계약을 체결했습니다. 이 시설은 연 18%의 이자율과 5%의 원발행자 할인, 2년 만기를 갖습니다. 회사는 기존의 전환 사채도 수정하여 이자율을 연 15%로 변경했습니다. CEO 마이클 밀스는 이 자금 조달이 일리노이주와 뉴저지의 개발 프로젝트를 지원할 것이라고 강조했으며, 이전의 오하이오 주 분배기 매각에 따른 잠재적인 250만 달러의 지급이 2025년 초에 예상된다고 언급했습니다.

Body and Mind (BMMJ) a sécurisé un accord de facilité de crédit avec le Bengal Catalyst Fund pour un montant pouvant atteindre 2,3 millions de dollars américains. La facilité porte un taux d'intérêt annuel de 18% avec un escompte de 5% pour l'émetteur d'origine et une période d'échéance de 2 ans. L'entreprise a également modifié ses obligations convertibles existantes en ajustant le taux d'intérêt à 15% par an. Le PDG Michael Mills a souligné que ce financement soutiendra des projets de développement dans l'Illinois et le New Jersey, et a mentionné un potentiel paiement de 2,5 millions de dollars américains attendu au début de 2025 suite à une vente antérieure d'un dispensaire dans l'Ohio.

Body and Mind (BMMJ) hat eine Kreditfazilität mit dem Bengal Catalyst Fund in Höhe von bis zu 2,3 Millionen US-Dollar gesichert. Die Fazilität hat einen jährlichen Zinssatz von 18% mit einem ursprünglichen Emittenten-Rabatt von 5% und einer Laufzeit von 2 Jahren. Das Unternehmen hat auch seine bestehenden wandelbaren Anleihen geändert und den Zinssatz auf 15% pro Jahr angepasst. CEO Michael Mills betonte, dass diese Finanzierung Entwicklungsprojekte in Illinois und New Jersey unterstützen wird und erwähnte eine potenzielle Zahlung von 2,5 Millionen US-Dollar, die Anfang 2025 aus einer vorherigen Verkaufsverpflichtung eines Dispensars in Ohio erwartet wird.

Positive
  • Secured US$2.3 million credit facility providing immediate working capital
  • Potential US$2.5 million cash payment expected in early 2025 from Ohio dispensary contingency
  • Flexibility to prepay loan amounts before maturity
Negative
  • High interest rate of 18% on credit facility
  • Additional 5% original issuer discount on borrowed funds
  • Company in 'serious financial difficulty' as stated in MI 61-101 exemption
  • Existing convertible debentures now secured against company assets

Las Vegas, Nevada and Vancouver, British Columbia--(Newsfile Corp. - October 25, 2024) - Body and Mind Inc. (CSE: BAMM) (OTC Pink: BMMJ) (the "Company" or "BaM"), a multi-state operations-focused cannabis company, is announcing entry into a credit facility agreement (the "Credit Facility") with Bengal Catalyst Fund, LP ("Bengal" or "Lender") for up to US$2.3 million, which is intended to be fully drawn down.

"The credit facility agreement gives the company flexibility to accomplish its near-term objectives of rationalizing its asset base and protecting shareholder value, which includes supporting the development of its in-process dispensary projects in Illinois and New Jersey," stated Michael Mills, CEO of Body and Mind. "Additionally, when we sold our Ohio dispensary, we negotiated a US$2.5 million contingent payment should a second retail license be awarded and subsequently opened. We are pleased to see the acquiror of such Ohio dispensary in process on developing a second dispensary and we now believe, but cannot guarantee given inherent uncertainties in these processes, that we should receive the US$2.5 million cash payment in early 2025."

Credit Facility

Any funds drawn on the Credit Facility bear interest at 18% per annum, paid monthly and funds loaned are subject to an original issuer discount (the "OID") at a rate of five percent (5.0%) of the principal amount of each Loan. The maturity date is 2 years from the first day any monies are borrowed and the US$2.3 million is available to be borrowed up to 1 year from execution of the Credit Facility. Until the maturity date, the Company is only obligated to make monthly interest payments and the Company has the right to prepay any amount prior to the maturity date. The Company has an obligation to make loan repayments from any key asset sale. In conjunction with the Credit Facility, the Company has also amended the convertible debentures (the "Convertible Debentures") previously issued to BAM I, a series of Bengal Catalyst Fund SPV, LP, Mindset Value Fund LP and Mindset Value Wellness Fund LP (together with Bengal, the "Lenders"), whereby the Convertible Debentures interest rate has been modified to 15% per annum, half paid in cash and half paid in kind. The payment in kind is calculated by increasing the principal amount of the Note in an amount equal to the accrued paid in-kind interest. The Lenders have waived the requirement of a Form S-1 registration statement for the shares underlying the Convertible Debenture for 22 months. The Company has executed a security agreement for the Credit Facility and the Convertible Debentures which rank pari passu so the Convertible Debentures that were previously unsecured are now secured, with priority payment on the Credit Facility. The Credit Facility has additional customary lending terms and the descriptions of the Credit Facility and associated agreements herein are qualified in their entirety by the text of such agreements, which will be posted to EDGAR and SEDAR+ as required by applicable securities laws.

The Company will issue 1,322,281 shares to the sellers of Canopy Monterey Bay in conjunction with previously disclosed transaction commitments. See press news releases dated Dec. 1, 2021, and June 21, 2022

Bengal and its related entities are a "related party" of the Company, and accordingly, Bengal's participation in the Credit Facility and the amendment to the Convertible Debentures constitutes a "related party transaction" within the meaning of Multilateral Instrument 61-101 ("MI 61-101"). The Company is relying on the exemption from the formal valuation requirement set out in Section 5.5(b) of MI 61-101 on the basis that no securities of the Company are listed or quoted on any of the prescribed exchanges set out therein. The Company is relying on the exemption from the minority approval requirement set out in Section 5.7(1)(e) of MI 61-101. Each of the directors of the Company, other than Joshua Rosen who abstained, is an "independent director" (as determined in accordance with MI 61-101) in respect to the Credit Facility and amendment to the Convertible Debentures and the board of directors, acting in good faith, determined that the Company is in serious financial difficulty, that the Credit Facility and amendment to the Convertible Debentures is designed to improve the financial position of the Company, and that the terms of the Credit Facility and amendment to the Convertible Debentures are reasonable in the circumstances of the Company. The Company did not file a material change report 21 days prior to the expected closing of the Credit Facility and amendment to the Convertible Debentures as the structure of the transaction had not been confirmed at that time.

About Body and Mind Inc.

BaM is an operations-focused cannabis company which operates retail cannabis dispensaries in California and Illinois, and pending retail operations in Illinois and New Jersey. We work daily to increase our market share through delighting customers while also continuing to hone our operational efficiencies to drive profits. We are primarily guided by the metric of return on investment. Currently, we believe the most significant return on investment projects in front of us are successful retail cannabis store launches in Illinois and New Jersey, which augment our existing retail footprint.

About Bengal Impact Partners

Bengal Impact Partners, LLC, ("Bengal Capital") is an alternative asset manager, dedicated investor, and strategic advisory firm within the cannabis industry. Bengal's principals are experienced investors, risk managers, and operators with significant hands-on experience leading and supporting cannabis companies.

Please visit www.bodyandmind.com for more information.

Instagram: @bodyandmindBaM
Twitter: @bodyandmindBaM

For further information, please contact:

Company Contact:

Michael Mills
CEO
Tel: 800-361-6312
ir@bodyandmind.com

Neither the Canadian Securities Exchange nor its Market Regulator (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.

Safe Harbor Statement

Except for the statements of historical fact contained herein, the information presented in this news release constitutes "forward-looking statements" as such term is used in applicable United States and Canadian laws. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any other statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans, "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and should be viewed as "forward-looking statements". Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and other factors include, among others, the actual results of activities, variations in the underlying assumptions associated with the estimation of activities, the availability of capital to fund programs and the resulting dilution caused by the raising of capital through the sale of shares, accidents, labor disputes and other risks. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release and in any document referred to in this news release.

Certain matters discussed in this news release and oral statements made from time to time by representatives of the Company may constitute forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Many of these factors are beyond the Company's ability to control or predict. Important factors that may cause actual results to differ materially and that could impact the Company and the statements contained in this news release can be found in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/227780

FAQ

What interest rate does Body and Mind (BMMJ) pay on its new credit facility?

Body and Mind (BMMJ) pays 18% interest per annum on the credit facility, with payments due monthly.

How much is the credit facility worth for Body and Mind (BMMJ)?

The credit facility agreement with Bengal Catalyst Fund is for up to US$2.3 million.

When does Body and Mind (BMMJ) expect to receive the Ohio dispensary contingent payment?

Body and Mind expects to receive the US$2.5 million contingent payment in early 2025, though this is not guaranteed.

What is the maturity period of BMMJ's new credit facility?

The credit facility has a maturity period of 2 years from the first day any monies are borrowed.

BODY AND MIND INC

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