MedMen Enterprises Inc. Announces Filing of Final Prospectus For Its C$75 Million Bought Deal Financing
LOS ANGELES, Sept. 22, 2018 (GLOBE NEWSWIRE) — MedMen Enterprises Inc. (“MedMen” or the “Company”) (CSE: MMEN) (OTCQB: MMNFF) (FSE: A2JM6N) is pleased to announce that it has filed and obtained a receipt for its final short form prospectus (the “Prospectus”) in connection with its previously-announced C$75,000,000 bought deal financing (the “Offering”) led by Eight Capital and Cormark Securities Inc., as co-lead underwriters, and including GMP Securities L.P. (collectively, the “Underwriters”), involving an offering (the “Offering”) of 13,636,364 units (the “Units”) at a price of C$5.50 per Unit (the “Issue Price”) for gross proceeds of approximately C$75,000,000. Each Unit consists of one Class B Subordinate Voting Share in the capital of the Company (each, a “Unit Share”) and one-half of one share purchase warrant of the Company (each whole share purchase warrant, a “Warrant”). Each Warrant will entitle the holder thereof to acquire, subject to adjustment in certain circumstances, one Class B Subordinate Voting Share in the capital of the Company at an exercise price of C$6.87 for a period of 36 months following the Closing Date (as defined herein). The Company has also granted to the Underwriters an option (the “Over-Allotment Option”) exercisable for 30 days after the Closing Date to purchase up to an additional 2,045,454 Units (or components of the Units), which, if exercised in full, would result in additional gross proceeds to the Company of C$11,250,000. The net proceeds from the Offering will be used for expansion of the Company’s retail network, development of cultivation and production facilities, to fund operating cash flow and for general corporate and other working capital purposes. The Offering is expected to close on or about September 27, 2018 (the “Closing Date”) and is subject to certain conditions.
As disclosed in the Prospectus, to supplement the net proceeds contemplated to be raised from the Offering and accelerate the execution of the Company’s strategic initiatives, the Company is currently in discussions with certain potential lenders in respect of a senior secured loan to be provided to certain of its subsidiaries. While the terms of any such loan remain subject to ongoing negotiation and subject to successful negotiation of definitive documentation, the current contemplated terms of such senior secured loan include an aggregate principal amount of between US$50 million and US$100 million for a two-year term at a market interest rate, a security package that will include senior security over certain assets of the debtor(s) and certain of their affiliates, customary positive and negative operational and reporting covenants and certain limited financial covenants. It is also contemplated that the Company or its subsidiary MM CAN USA, Inc. will issue to the lenders warrants providing coverage against the principal amount of the loan. The proceeds from any such senior secured loan are anticipated to be used for acquisitions, capital expenditures and general corporate purposes. However, there is no assurance that any such loan will be available or will be completed on terms which are satisfactory to the Company or that the proceeds therefrom will be used for any such purposes. Further details can be found in the Prospectus.
The Company also disclosed in the Prospectus that it is in the process of structuring a transaction in which four (4) properties owned by subsidiaries of the Company would be sold to a limited liability company, which could result in net proceeds to the Company, after repayment of debt, of between US$25 million and US$30 million. The properties sold would subsequently be leased by the Company or a subsidiary at market rates under long-term leases. Further details can be found in the Prospectus.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
MedMen Enterprises is a leading cannabis company in the U.S. with assets and operations across the country. Based in Los Angeles, MedMen brings expertise and capital to the cannabis industry and is one of the nation’s largest financial supporters of progressive marijuana laws. Visit http://www.medmen.com
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