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Australis Capital Closes Investment in Body and Mind´s Nevada and Ohio Expansion
Thursday 08 November 2018

8 November 2018 - Canadian investor Australis Capital Inc. (CSE: AUSA) has closed an agreement with Body and Mind Inc. (CSE: BAMM) (OTC: BMMJ) to purchase units and debentures of medical and recreational cannabis cultivation and production and retail BaM, the firm said.

BaM products include dried flower, edibles, topicals, extracts as well as GPEN Gio cartridges. BaM marijuana strains have won numerous awards including the Las Vegas Hempfest Cup 2016, High Times Top Ten, the NorCal Secret Cup and the Emerald Cup.

Under the deal, Australis acquired 16m units of BAM, each comprised of one common share and one common share purchase warrant, at a purchase price of USD 0.40 per unit for USD 6.4m, and USD 1.6m principal amount 8% unsecured convertible debentures of BaM maturing two years following the date of issue.

The parties have agreed to negotiate in good faith a license agreement pursuant to which Australis will gain an exclusive and assignable license to use the BaM brand outside of the United States on commercially reasonable terms.

In addition, in connection with the Financing, Australis Capital (Nevada) Inc., a wholly-owned subsidiary of the company, will enter into a commercial advisory agreement with BaM, pursuant to which Australis Nevada will provide advisory and consulting services to BaM for a term ending on the date that is the earlier of: five years following the closing of the transactions contemplated by the Investment Agreement, and the date Australis no longer holds 10% or more of the issued and outstanding common shares of BaM.

Subject to certain exceptions, Australis will be entitled to maintain its' pro rata interest in BaM until such time as it no longer holds 10% or more of the issued and outstanding common shares.

Assuming that no share purchase warrants and/or stock options outstanding prior to the financing are exercised, upon closing of the Financing Australis will hold approximately 25% of the currently issued and outstanding common shares of BaM.

Further, using the same assumptions as above, and assuming the exercise of the warrants and the conversion of the debentures by Australis, Australis will hold approximately 35.142m common shares, representing approximately 42% of the issued and outstanding common shares of BaM.

Australis Capital identifies and invests in the cannabis industry predominately in the United States, a highly regulated, fragmented, rapidly expanding and evolving industry. Investments may include and are not limited to equity, debt or other securities of both public and private companies, financings in exchange for royalties or other distribution streams, and control stake acquisitions.

BaM is a publicly traded company investing in medical and recreational cannabis cultivation and production and retail. Its wholly-owned Nevada subsidiary was awarded one of the first medical marijuana cultivation licences and holds cultivation and production licenses.

The firm continues to expand operations in Nevada and Ohio and is constantly reviewing accretive expansion opportunities.
Date Published: 08/11/2018
Target: Body and Mind Inc/stake
Country: USA
Deal Size: 8m (USD)
Sector: Agriculture/Forestry
Type: LBO
Financing: Cash and Stock
Status: Closed
Buyer: Australis Capital Inc