Body and Mind Inc. BAMM BMMJ provided an update on the first amendment to the Seaside dispensary purchase agreement.
The company, though its wholly owned subsidiary, DEP Nevada, Inc., executed definitive agreements to purchase the Reef dispensary in Seaside California on November 30, 2021 and has been operating the dispensary since December 1st, 2021.
The transaction has been amended to reduce the cash purchase price from $2.5 million to $1.25 million. The company will issue $1.25 million worth of shares of the company's common stock based on the 10-day VWAP on the ten consecutive trading days prior to June 17, 2022 being the "effective date" of the first amendment and subject to compliance with the policies of the Canadian Securities Exchange.
The company also agreed to issue additional shares of common stock equal to the difference between the amount of the shares of common stock of the company that were issued on December 3, 2021 (the "MIPA #2 Shares") and the amount of shares of common stock that would have been issued had the 10-day VWAP for the MIPA #2 shares been calculated as of the effective date of the first amendment. Additionally, on the date that is eighteen months following the effective date of the first amendment, the company will issue $100,000 worth of shares to the sellers based on the 10-Day VWAP and subject to compliance with the policies of the CSE, calculated as of the additional share issuance date.
Furthermore, the company has agreed to issue $300,000 worth of shares of common stock in advance of the working capital true-up payment outlined in the original agreement. If the actual working capital is less than $nil, then then purchase price will be reduced by such amount and the additional true-up shares will be forfeited and cancelled.
If the actual working capital is greater than $nil and the additional true-up shares are sufficient to cover the difference, then all or a portion of the additional true-up shares will be delivered to the sellers. If the additional true-up shares are insufficient to cover the difference owing by DEP to the sellers, then the additional true-up shares will be delivered to the sellers and the company will issue additional shares of common stock to cover any shortfall.
"The combination of our recent debt extension, pausing our Michigan cultivation and reduced cash payment for the Seaside dispensary are designed to strengthen the Body and Mind balance sheet for future development," stated Michael Mills, CEO of Body and Mind. "We continue to focus on our cultivation, manufacturing and retail operations as we expand our brand and wholesale business and develop new strains and innovative products."
Q3 Periodic Report and Earnings Update
The company anticipates filing its Form 10-Q for the three and nine months ended April 30, 2022 after market on June 21, 2022 with a Q3 earnings call scheduled for 5:00 p.m. Eastern time on June 21, 2022.
Photo by CRYSTALWEED cannabis on Unsplash
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