- Size reduced from C$120 million to C$75 million
- Price reduced from C$6.80 to C$5.50
- Warrant exercise price reduced from C$10.00 to C$6.87
- Warrant coverage increased from 50% to 100%
In a New Cannabis Ventures interview, MedMen CEO Adam Bierman commented on the ordeal:
“Shortly after the announcement, the global market experienced a significant sell off and as we ended last week the investors that bought that deal would have been underwater. That did not sit right with us and, accordingly, we initiated a discussion with Canaccord about repricing the deal to ensure our investors would be buying the deal based on an offering ripe for the returns we constantly seek to create.” – Adam Bierman, MedMen CEO
While Bierman is correct about the rough past week, the reasoning for changing the financing being related to share share-price is silly and also a slap on the wrist for longer term investors like the ones who bought when the stock was trading in the $8-$9 range.
CFO Out Is A Coincidence? Really?
On the same day MedMen’s CFO left the company, management has said that this has nothing to do with the altered financing and that is purely a coincidence. We have previously written about MedMen’s finances,.
According to their most recent financials for the year ended June, 2018 MedMen incurred a net loss of $112,264,844.
Their expenses totalled $98,180,978, $27,058,150 of which were in salaries and benefits. This type of spending is becoming a trend, in 2017, the company had $14,138,166 in expenses, nearly half of which was in salaries and benefits at $6,002,760. Their saving grace up until this point has been their ability to raise money, the company has raised $238,304,659 to date, 101,802,288 coming from the private placement during their RTO.
With the type of spending MedMen is used to more of these finances are going to be critical for the company to have any kind of longevity.
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