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    BMMJ   US09689V1008

BODY AND MIND INC.

(BMMJ)
Delayed OTC Markets  -  05/23 01:06:16 pm EDT
0.1700 USD   +27.46%
04/07BODY AND MIND : San Diego Dispensary Rebranded from ShowGrow to Body and Mind - Form 8-K
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04/07BODY & MIND INC. : Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K)
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04/07Body and Mind Provides Corporate Update
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BODY & MIND INC. : Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K)

12/01/2021 | 05:19pm EDT

Item 7.01 Regulation FD Disclosure

On December 1, 2021, Body and Mind Inc. (the "Company" or "BaM") issued a news release to announce the entering into of two definitive agreements with Canopy Monterey Bay, LLC ("Canopy") and the membership interest owners (the "Sellers") of Canopy to acquire an aggregate of 100% of Canopy, which owns a retail dispensary in the limited license jurisdiction of Seaside, California.

"We are excited about the opportunity to add revenue and expand our retail and brand deeper into the California market with the acquisition of this limited license dispensary," stated Michael Mills, CEO of Body and Mind. "The Reef was opened in 2018 and is located in downtown Seaside close to Monterey State Beach with a large local and visitor clientele for both in store and curbside pickup. The Reef has a history of supporting creative projects in the community and has an extensive retail delivery operation. We see numerous synergies to grow our footprint in the California market with the knowledgeable and professional team at The Reef and are excited about the excellent talent addition to the Body and Mind team." "Body and Mind will takeover management of The Reef operations effective December 1, 2021 and anticipates consolidating revenues from the acquisition as soon as local and state approvals have been granted."

The first purchase agreement ("PA #1") between BaM's subsidiary, DEP Nevada, Inc. ("DEP"), Canopy and all of the Sellers provides for the assignment of 80% of the membership interests of Canopy to DEP in exchange for a purchase price of US$4.8 million comprised of US$2.5 million in cash (the "Cash Purchase Price") and a secured promissory note in the amount of $2.3 million bearing interest at a rate of 10% per annum compounded annually and having a maturity date of five years from the effective date of PA #1. Interest is payable for the first 6 months with the principal and accrued interest due at maturity. There are no prepayment penalties. The Cash Purchase Price is to be paid into escrow pursuant to an escrow agreement between the parties to PA #1 and Secured Trust Escrow, which Cash Purchase Price is to be released to the Sellers upon the receipt of city and state approval, or returned to DEP in the event of the denial of city and state approval and the agreement is terminated, in which case the 80% membership interests will be transferred back to the Sellers and the promissory note will be terminated. The second purchase agreement ("PA #2") between DEP and the one continuing Seller provides for the assignment of the remaining 20% of the membership interests of Canopy to DEP following the receipt of the city and state approval under PA #1 in exchange for US$1 million to be paid in either shares of common stock of BaM (the "Consideration Shares") or in cash at DEP's sole option if such payment takes place within six (6) months following the execution of PA #1. If DEP elects to pay the purchase price in Consideration Shares, the amount of Consideration Shares shall be determined based on the 10 day volume weighted average price ("VWAP") ending on November 30, 2021, which is US$0.3665 per share for a total of 2,728,156 shares. In the event that six (6) months following the execution of PA #1, the value of the Consideration Shares have decreased such that total value of the Consideration Shares is less than ninety percent (90%) of its value, DEP agrees to cause BaM to issue an additional One Hundred Thousand Dollars ($100,000.00) worth of shares of common stock of BaM (the "Additional Shares") to be issued to the one continuing Seller based on the ten day VWAP calculated as of six (6) months following the closing of PA #1. PA #2 contains a working capital adjustment provision, which provides that if there is a working capital deficiency as of the closing date of PA #1, then the purchase price under PA #2 shall be reduced by the amount of the deficiency, and if there is a working capital surplus as of the closing date of PA #1, then the purchase price under PA #2 shall be increased by the amount of the surplus.




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Michigan Dispensary



The Michigan dispensary is near completion of renovations with final installation of security systems and point of sale equipment. The Company has hired an experienced manager and staff training has commenced in preparation for opening in December pending all final approvals.



Arkansas Cultivation


Body and Mind flower is now available at the Body and Mind dispensary in West Memphis, AR. This is the first flower from the Arkansas cultivation operations.

Amendment to Loan Agreement

The Company and Focus Growth Agency Lending LLC have amended the loan agreement (see news release July 20, 2021) to extend the delayed draw request period to June 1, 2022. The amendment provides The Company with flexibility to request funds later than the original draw date which will allow more efficient use of capital for development projects.



Capital Markets Advisory


The Company has signed a consulting agreement with Skanderbeg Capital Advisors Inc. to provide capital market advisory services, including introductions to prospective investors and merger and acquisition transactions and advising on capital structuring and other financial aspects of financings or strategic transactions. Skanderbeg Capital Advisors is a boutique merchant bank and capital advisor firm, which is focused on identifying companies with highly prospective business opportunities in the natural resource, technology, biotech and special situations sectors. The Company will pay a monthly fee of CAD$ 7,500 and a one-time payment of 200,000 options priced at CAD$ 0.44.

Grant of Stock Options to Executives

The Company has granted an aggregate of 448,000 stock options (the "Options") in accordance with the Company's stock option plan at an exercise price of CAD$0.44 per share for a term of five years expiring on November 30, 2026. The Options were granted to BaM's CEO and COO.

The Options are subject to vesting provisions such that 25% of the Options vest six (6) months from the date of grant, 25% of the Options vest twelve (12) months from the date of grant, 25% of the Options vest eighteen (18) months from the date of grant and 25% of the Options vest twenty-four (24) months from the date of grant.

A copy of the news release is attached as Exhibit 99.1 hereto.

Item 9.01 Financial Statements and Exhibits




(d) Exhibits



Exhibit    Description

  99.1       News Release dated December 1, 2021.





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Financials (USD)
Sales 2021 25,7 M - -
Net income 2021 -2,26 M - -
Net Debt 2021 0,53 M - -
P/E ratio 2021 -16,8x
Yield 2021 -
Capitalization 15,1 M 15,1 M -
EV / Sales 2020 4,92x
EV / Sales 2021 1,51x
Nbr of Employees 101
Free-Float 87,0%
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Managers and Directors
Michael Mills President, Chief Executive Officer & Director
Dong H. Shim Chief Financial Officer & Director
Stephen Trip Hoffman Chief Operating Officer & Director
Brent Reuter Independent Director
Alexis Podesta Director