MedMen Enterprises Inc (MMEN)

[JohnCM]

MedMen Provides Additional Detail on the Agreement to Acquire PharmaCann

10/15/2018

MedMen Enterprises Inc. (“MedMen” or the “Company”) (CSE: MMEN) (OTCQB: MMNFF) (FSE: A2JM6N) and Chicago-based PharmaCann LLC (“PharmaCann”) have provided additional detail related to the binding letter of intent (the “Agreement”) for MedMen to acquire all of PharmaCann’s outstanding equity interests. Under the terms of the Agreement, PharmaCann units will be exchanged for equity interests which will include the right to receive the Company’s Class B Subordinate Voting Shares (“Shares”), and which on a pro-forma basis will equal 25% of the then fully-diluted outstanding shares of the Company (calculated based on the treasury stock method) upon the closing of the transaction (the “Closing”). The total transaction was valued at $682 million (USD) based on the closing price of the Company’s Class B Subordinate Voting Shares on October 9, 2018 (such value being subject to change based on the daily closing price of the Company). No change of control to the Company will result upon the Closing. The Shares are expected to be subject to lock up agreements for a period of between 6-12 months.

The transaction is subject to regulatory approvals by various local and state authorities in each of the U.S. states where PharmaCann’s assets and licenses are held (the “Approvals”). The Closing is expected to take 6-12 months based on the receipt of the Approvals. In the event that certain Approvals are not obtained by the Closing, a portion of the Share consideration, as determined by the parties (but in no event more than 30% of the consideration), will be held in escrow until the Approvals are received, and such escrowed Shares shall be released to PharmaCann unitholders upon the receipt of such Approvals. In the event that an Approval is not able to be obtained within 24 months following the execution of definitive documentation, the parties shall will use commercially reasonable efforts to transition such license to a third party with any such proceeds going to the Company and any related escrowed shares released to PharmaCann unitholders.

Transaction Details

Based on the closing price of the Company’s Class B Subordinate Voting Shares as of October 9th, the total transaction is valued at $682 million and will be satisfied by the issuance of Class B Subordinated Voting Shares of the Company. Under the terms of the Agreement, PharmaCann holders will own approximately 25 percent of the fully-diluted shares of the Company upon closing and will be subject to lock up agreements for a period of 6-12 months. The specific transaction structure is subject to ongoing tax, financial, and regulatory advice.

Outstanding Shares
28,775,175
06/14/2018

add 9,000,000 = approx 37,775,000, 9M being approx 1/4 of outstanding shares

$682,000,000 divided by 9,000,000 = $75.00 per share ??

Current price $7.00 divided into $682,000,000 = 97,400,000 shares

97,400,000 + current 28,775,000 = 126,175,000 outstanding