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Original AUSA....BMMJ $8 million deal

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LongNDeep2   Wednesday, 07/10/19 12:00:57 AM
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Original AUSA....BMMJ $8 million deal

IF...IF....IF.....AUSA were to invest in Citation Growth...who knows how the deal would be structured. IF....they invested $10 million.....that would be similar in size to the BMMJ deal. Here is the $8 million deal between AUSA and BMMJ.

Notice an initial 25% stake in the company...with options for gaining 42% of BMMJ. Also notice that Scott Dowty took a position on their board. Also note that if AUSA were to increase ownership to 42%.....they get to add an additional board member.

This is why I hope Dowty gets on our board. If they take a $10 million position in Citation....it would be likely it would be part of the deal. If AUSA were to take an additional stake...as they did several times with BMMJ....that may bring an additional board member to Citation.

So if AUSA does invest...likely we could end up with two board members from AUSA. Plus we have Rivera. That certainly could put an ACB slant on things.

All speculation....and potential. IMHO.......Citation Growth would be bringing a lot more to the table than BMMJ did. The BMMJ deal let AUSA get their feet wet in Vegas. A deal with Citation...would be gaining the largest organic license footprint in the state.

One option I've also considered....would be if AUSA bought us out....then ACB would own a portion of us through AUSA...after legalization...when claiming the stake in AUSA back.



VANCOUVER, British Columbia, November 5, 2018 /PRNewswire/ --

Body and Mind Inc. (CSE: BAMM) (US OTC: BMMJ) (the "Company" or "BaM") announced today that it has closed the previously announced sale of securities pursuant to an investment agreement (the "Investment Agreement") with Australis Capital Inc. (CSE: AUSA) ("Australis").

Director Appointment

The Company is pleased to announce the appointment of Mr. Scott Dowty as a director of the Company. Mr. Dowty will replace Chris Macleod on the board of directors. Mr. Dowty is the CEO and Director of Australis Capital Inc. and brings 25 years of experience evaluating companies and markets to identify key business drivers, spur rapid revenue and profit growth in competitive and highly regulated global markets. Mr. Dowty has held executive and corporate officer positions with NYSE and NASDAQ listed companies, founded several successful start-up companies in North America and has held Board positions within market leaders in the Cannabis industry. Mr. Dowty's extensive operational experience in the International fintech and gambling sectors is closely aligned to the regulatory path of the U.S. cannabis industry.

"I am eager to add immediate value to the BAMM franchise both as Director and as CEO of Australis Capital, a large strategic investor in BaM," states Scott Dowty. "Just as Aurora Cannabis built their global platform and spun-out Australis Capital, we will leverage strategic relationships while exercising a disciplined and aggressive approach in expanding BaM's reach and creating value for BaM shareholders."

Robert Hasman, Director of BaM commented "This strategic partnership with Australis' will provide BaM with tremendous opportunities as a result of an immense deal flow. The domain knowledge of the Australis network is industry leading and will be invaluable as we focus our attention on strengthening our two key franchises in Nevada and Ohio. We would like to welcome the CEO of Australis, Mr. Scott Dowty, to our board of directors and would like to thank Chris Macleod for his contributions to the board of directors and wishes him well in his future endeavours."

Subject to applicable laws and the rules of the CSE, for as long as Australis owns at least 10% of the issued and outstanding Common Shares, Australis will be entitled to nominate one director for election to the Board of Directors of the Company (the "Board"). If Australis exercises all of the Warrants and converts all of the Debentures purchased in the Financing, Australis will be entitled to nominate a second director for election to the Board.

Investment Agreement

Pursuant to the terms of the Investment Agreement, Australis has acquired (i) 16,000,000 units (the "Units") of BaM, each comprised of one common share (a "Common Share") and one common share purchase warrant (a "Warrant") of the Company, at a purchase price of $0.40 per Unit for gross proceeds of $6,400,000, and (ii) $1,600,000 principal amount 8% unsecured convertible debentures (the "Debentures") of the Company maturing November 2, 2020 (collectively, the "Financing").

Each Warrant is exercisable to acquire one Common Share of the Company at an exercise price of $0.50 per share for a period of two years, subject to adjustment and acceleration in certain circumstances. If the closing price of the Common Shares on the Canadian Securities Exchange (the "CSE") (or such other stock exchange on which the Common Shares are then listed) is equal to or greater than $1.20 for 30 consecutive trading days, BaM may accelerate the expiration date of the Warrants on 30 days' notice to Australis.

The Debentures bear interest from the date of issuance (the "Issue Date") at a rate of 8% per annum, calculated and payable semi-annually, in arrears. Repayment of the then outstanding principal amount of the Debentures, together with any accrued and unpaid interest thereon, is to be made on or prior to 5:00 p.m. (Vancouver time) on November 2, 2020 (the "Maturity Date"). The Debentures are convertible at the option of Australis into Common Shares at a conversion price equal to $0.55 per Common Share up to the Maturity Date, subject to adjustment and acceleration in certain circumstances. If, at any time after the Issue Date and prior to the Maturity Date, the closing price of the Common Shares on the CSE (or such other stock exchange on which the Common Shares are then listed) is equal to or greater than $1.65 for 20 consecutive trading days, BaM may force the conversion of the then outstanding principal amount of the Debentures (and any accrued and unpaid interest thereon) at the then applicable conversion price on not less than 10 business days' notice to Australis.

Australis now holds approximately 25% of the issued and outstanding Common Shares of BaM. Assuming the exercise of the Warrants and the conversion of the Debentures, Australis would hold approximately 35,142,000 Common Shares of the Company, representing approximately 42% of the issued and outstanding Common Shares of BaM. The Units and Debentures are being acquired for investment purposes and Australis may increase or decrease its position as future circumstances may dictate and subject to applicable securities laws.

The Company intends to use the proceeds of the Financing (i) to repay all but USD $1,000,000 of the promissory notes issued in connection with the Company's acquisition of Nevada Medical Group LLC. The promissory note holders have agreed to extend the due date of the USD $1,000,000 to February 14, 2020 (ii) for strategic acquisitions and/or investment opportunities within the State of Ohio, (iii) for development, build out and equipment purchases for the NMG Ohio dispensary and/or production facility, (iv) to pay advisory fees payable to the Company's financial advisor, and (v) for working capital purposes.

Canaccord Genuity Corp. acted as financial advisor to BaM in connection with the Financing.

The securities issued by the Company 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 unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or a solicitation of any offer to buy any securities of the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful.

I could be wrong about AUSA.....we could get $10 million from a number of sources....but my guess is Rivera would choose a company with ACB affiliations.



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