RE:RE:Convertible DebenturesI don't know exactly how these convertible debentures work. Which is why I am asking the question. I believe that Aleafia can pay the $25,000,000 straight up, or holders of units can convert to shares?
If they holders of the debt choose to convert to shares, it dilutes current shareholders.
My understanding is that they were originally sold at $1000 per unit and convertible at $2.3875 per share.
Gross proceeds at the time was $25,000,000 CAN
Conversion ratio would then be $1000 divided by $2.3875 which equals 418.848168 shares per unit.
So, 25 million in proceeds, divided by $1000 equals 25,000 units
25,000 units multiplied by 418.848168 equals 10,471,204 shares.
Again, I'm not sure how these thing work. It really has nothing to do with liquidity more about diluting existing shareholders if debt holders convert to shares. I'm question the ratio of that conversion as share price has gone down since they were issued.
So I'm unsure whether holders of debentures convert at aprox 418 shares per unit or whether it is actually around 5 times that number in order to meet that $2.3875 original conversion price it would take more shares.
As share price is about 5x less than original conversion price... $2.3875 divided by current share price of 0.52 CAN would be 4.775.
4.775 x 10, 471, 204 = 50 million new shares that would be added, which would dilute existing shareholders tremendously. Again, I'm just trying to figure it out how these convertible debentures work. I could be totally wrong at the conversion ratio.
I just don't know how these convertible debentures work, so I'm asking those more knowledgeable on this Board what the deal is!