MedMen Gets Support From Gotham Green, Withdraws Guidance Due To Coronavirus
Cannabis retailer MedMen Enterprises Inc. (CSE:MMEN) (OTC:MMNFF) said Monday it has closed on $12.5 million in extra gross proceeds as part of its $250 million senior secured convertible debt facility led by Gotham Green Partners associated funds.
Under the facility, Gotham Green Partners with related partners and other co-investors have supported the company with a total of $147.5 million.
MedMen also said that together with its subsidiary MM CAN USA Inc., it's co-issuing extra senior secured convertible notes to the lenders under the facility. The conversion price per class B subordinate voting share is set to 26 cents per share.
Furthermore, the cannabis company will also issue the lenders 48.08 million share purchase warrants, with each enabling the holder to buy one subordinate voting share at a price of 26 cents per share in the five years since the date of the issuance.
The company also amended and restated the securities purchase agreement, enabling wider access to capital and extra operating flexibility.
MedMen provided additional operational updates such as the sale of its Illinois-based facility for which it has obtained first payment of $10 million in February, and the second of $7 million in March. It has also made management changes, hiring Tom Lynch as interim CEO and CRO, and Tim Bossidy as interim COO.
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In addition, the company has withdrawn its fiscal year 2020 and 2021 revenue and store count guidance from December because of the new situation caused by the COVID-10 pandemic. It has also pulled back its timing projections for reaching positive adjusted EBITDA, positive EBITDA and positive free cash flow.
“Gotham Green Partners has been a crucial source of support and guidance in this challenging environment,” Ben Rose, Executive Chairman said in a statement. “MedMen will continue to execute its turnaround plan, balance the needs of key stakeholders in these uncertain times and remain focused on strengthening its brand and retail experience. “
MedMen’s shares were trading 14.16% lower at 26 cents per share on Monday
Photo courtesy of MedMen.
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