General Meeting and Share Purchase Plan
General Meeting and Share Purchase Plan
Perth, Jan 23, 2019 AEST (ABN Newswire) - MMJ Group Holdings Limited (ASX:MMJ) (OTCMKTS:MMJJF) ("MMJ") has issued the attached notice to hold a meeting of MMJ shareholders on 22 February 2019 to approve, amongst other things, the launch of a share purchase plan ("SPP") as announced on 19 December 2018.

Rationale for the SPP

The board of MMJ ("the Board") believes that a SPP is the fairest and most efficient means of raising equity from MMJ's existing shareholders. As such, MMJ wishes to provide an opportunity for eligible shareholders to participate in the SPP offer which will, if approved by shareholders, be launched after conclusion of the general meeting.

In reaching the decision to launch the SPP, the Board took into account the following:

- MMJ's current unaudited cash balance is $2.6 million and is expected to fund its budgeted operations for the next 14 months excluding any cash received from future asset sales or capital raisings;

- While MMJ has the ability to sell some or all of the shares held in its listed public company investments (namely, at this time, Harvest One Cannabis Inc and MediPharm Labs Inc) on-market (should it be deemed by the Board to be in the best interests of shareholders to do so), it does not currently consider that it would be prudent to liquidate these investments. This strategy has, so far, proved successful, with share prices of Harvest One Cannabis Inc and MediPharm Labs Inc increasing since 19 December 2018; and

- MMJ continues to be invited to invest funds into the global cannabis market in line with its investment mandate and believes that it is in the best interests of shareholders to raise equity funds from its existing shareholders so that MMJ can be better positioned to participate in such investment opportunities.

Key terms of the SPP

The key terms of the SPP are as follows:

1. The maximum amount to be raised under the SPP is $10,000,000;

2. Participation in the SPP will be optional and open to all MMJ shareholders registered as at 7.00pm (AEDT) on 22 January 2019 with a registered address in Australia or New Zealand ("Eligible Shareholders");

3. If approved by MMJ's shareholders, the SPP will provide MMJ's Eligible Shareholders the opportunity to purchase up to $15,000 worth of shares, irrespective of the size of their shareholding, without incurring brokerage or transaction costs ("SPP Offer").

4. The SPP issue price will be determined closer to the date of the SPP Offer, however MMJ notes it will not be less than 80% of the volume weighted average price for MMJ shares (calculated over the last 5 days on which sales of the shares were recorded before the day on which the SPP Prospectus is lodged) ("SPP Issue Price"). The issue date under the SPP is intended to be on or around the end March or early April 2019.

5. The maximum number of shares to be issued is that number, which, when multiplied by the SPP Issue Price, equals $10,000,000. To clarify, the maximum would be determined as follows:

Maximum number of Shares = $10,000,000/SPP Issue Price;

6. In the event that less than $10,000,000 is applied for under the SPP by MMJ's Eligible Shareholders, the Board will seek to place a number of shares at the SPP Issue Price to raise up to $10,000,000 when combined with the amount raised under the SPP.

Potential application of funds raised from the SPP

In addition to opportunities to invest funds into the global cannabis market in line with MMJ's investment mandate, MMJ also holds warrants (similar to 'options' in Australia) in a number of its existing investments which provide opportunities for MMJ to invest up to CAD$10.6 million and realise potential gains on exercise over the next two years, as follows:(see link below)

Chairman's Comments

Commenting on the planned SPP, MMJ's Chairman Peter Wall said "Whilst our current cash position is robust and provides more than a year of budgeted corporate working capital, the planned SPP is expected to position MMJ to both participate in further cannabis sector investment opportunities and enable us to patiently manage our existing portfolio. We look forward to obtaining the approval of MMJ's shareholders to issue the SPP prospectus for consideration by MMJ's Eligible Shareholders."

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About MMJ Group Holdings Ltd

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MMJ Group Holdings Ltd (ASX:MMJ) is a global cannabis investment company. MMJ owns a portfolio of minority investments and aims to invest across the full range of emerging cannabis-related sectors including healthcare, technology, infrastructure, logistics, processing, cultivation, equipment and retail. For MMJ's latest investor presentation and news, please visit:



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