Blum Holdings Inc (BLMH)

[Magnum7419]

"During March 2017, we executed a lease for 13,000 square feet of industrial space on over 30,000 square feet of land in Oakland’s industrial corridor. We are in the final designing stages of our cultivation facility. We expect to complete construction by late 2017."

FYI cultivation takes ten weeks from seed to sale ........mimimun

Blüm San Leandro
We expect to complete construction of the dispensary by late 2017 and we expect to complete construction of the production lab and community meeting space by early 2018.

Edible Garden is dependent on one major customer. One customer, NB Plants, comprised 29%, 74% and 83% of the Company’s total consolidated sales for the years ended December 31, 2016, 2015 and 2014, respectively

As of the date of this Annual Report on Form 10-K, we had 175 employees.

To date, our operations have been funded primarily from the proceeds of debt and equity financings. We expect to require substantial additional capital in the near future to commence operations at the proposed cultivation and production facilities in Reno and Las Vegas Nevada, the proposed cultivation facility in Oakland, California and the proposed dispensary and production facility in San Leandro California, expand our product lines, develop our intellectual property base, and establish our targeted levels of commercial production. We may not be able to obtain additional financing on terms acceptable to us, or at all.

If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership held by our existing stockholders will be reduced and our stockholders may experience significant dilution.

On January 8, 2016, we granted to certain of our directors, executive officers, and employees ten-year options to acquire 6,700,000 shares of Common Stock at an exercise price of $0.09 per share


For the year ended December 31, 2016, senior secured convertible promissory notes and accrued interest in the amount of $13,558,388 was converted into 56,678,708 shares of common stock.

We anticipate requiring additional capital for the commercial development of our subsidiaries. Assuming MediFarm and MediFarm II receive all the necessary permits and licenses applied for, we anticipate we will need an additional $8 million in capital for the commercial development of these subsidiaries.

Cash provided by financing activities for the year ended December 31, 2016 was approximately $23.08 million,

As of December 31, 2016, we had no outstanding variable-rate debt and $6,214,324 of principal fixed-rate debt.


On December 16, 2016, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an accredited investor (the “Purchaser”) pursuant to which the Company sold to the Purchaser a 12% Senior Convertible Promissory Note due June 16, 2018


In the acquisition of assets from Therapeutics Medical, the Company may be required to issue an additional Convertible Promissory Note to the seller based on the following calculation (the “Therapeutics Contingent Consideration”):

In the first quarter of 2017, senior secured convertible promissory notes and accrued interest in the amount of $3,434,463 were converted into 15,115,154 shares of common stock.

In the first quarter of 2017, the Company sold 4,631,504 shares of common stock for the net amount of $1,300,000 pursuant to an equity financing facility with Dominion Capital, LLC.

Securities Purchase Agreement Dated February 22, 2017 and 12% Senior Convertible Promissory Note Due August 22, 2018

On February 22, 2017, the Company entered into a Securities Purchase Agreement (the ‘Purchase Agreement”) with an accredited investor (the “Purchaser”) pursuant to which the Company sold to the Purchaser a 12% Senior Convertible Promissory Note due August 22, 2018 (the “Note”) in the principal amount of $3,000,000 for a purchase price of $3,000,000 (the “Offering”).

All principal and interest due and owing under the Note is convertible into shares of Common Stock at any time at the election of the holder at a conversion price per share equal to the lower of (i) $0.2495 or (ii) 85% of the lowest daily volume weighted-average price of the Common Stock in the fifteen (15) trading days prior to the conversion date (the “Conversion Price”), which Conversion Price is subject to adjustment for (i) stock splits, stock dividends, combinations, or similar events and (ii) full ratchet anti-dilution protection. Upon certain events of default, the conversion price of the Note will automatically become 70% of the average of the three (3) lowest volume weighted-average prices of the Common Stock in the twenty (20) consecutive trading days prior to the conversion date for so long as such event of default remains in effect.

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