New independent directors will be appointed or elected to the board
Following its earnings announcement on Monday after the close, MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) said that it was making certain amendments to its $250 million senior secured convertible credit facility arranged by Gotham Green Partners including changes to the company’s board. MedMen said it has agreed to form a committee to select new independent directors to be appointed or elected to the board, which directors would form a majority of the board. MedMen said it will propose director candidates to this committee for consideration and approval.
Changes To The Terms
MedMen said that the aggregate amount that remains available to be borrowed has not changed, but “In order to minimize dilution given the current capital market environment, both parties have agreed to amend the size of both Tranche 3 and Tranche 4, as well as the timing of Tranche 3. Tranche 3 now consists of $10 million in available credit and Tranche 4 consists of $115 million in available credit. The parties anticipate that Tranche 3 will be funded within 30 days instead of the originally proposed date in December 2019.”
The larger Tranch 4 will require the consent of both MedMen and Gotham Green under the Facility. Some of the reporting and financial covenants under the Facility have also been modified to provide MedMen with additional balance sheet flexibility. Changes in the covenants included a reduction in required minimum cash balances, removal of restrictions on equity issuances and an additional ability to spin-out or borrow against certain non-core assets, in addition to sales and indebtedness that were permitted prior to the amendment.
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