Aleafia Health Inc ALEAF

Convertible Debentures

[sincitywizard]

I'm trying to figure out the amount of potential possible dilution to shareholders with regards to the Emblem convertible debentures issued in March 2019 that mature on February 2nd, 2021.

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.

Does this math add up to everyone?  Am I understanding how these convertible debentures work correctly?  

Please advise.  Thanks!

The Wiz

[Miamirules]

So what your saying is that $25 million is not payable ? 

[OldSchooI]

That's is incorrect if he's saying that.

[Toweringmars]

Math works out, but I'm not so sure I would worry about the debs. Companies like JnJ and Unifor wouldnt do deals with a company with liquidity issues.   

[sincitywizard]

I 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

[ShakngMyHead00]

Who you kidding. You know exactly how they work. That's why you wrote that essay.

[sincitywizard]

Actually I really don't know how they work.  You give me too much credit!  For the record, I am long this stock.  I want the share price to go UP!  Look at my posts on this Board and on Seeking Alpha.  You'll see I am a believer in the company and have defended it for years. I am LONG. I have posed some questions in my last few posts only because I am just

[wrangler327]

I going to sum it up in one sentence, the conversion is worthless and the principal sum must be paid in full come February. 

[sincitywizard]

Thanks for the quick repies guys. Happy to read that there will not be further dilution assuming that Aleafia pays off the $25 million with cash on hand or a low interest loan from a bank.  I was concerned about a lower share price being one of the conditions that would adjust the conversion ratio for the debenture holders.  I mistakenly figured that since debenture holders are lending

[wrangler327]

Who in their right mind would convert at $2.38 when we are trading at $0.53. Yes, we can pay it off with existing cash but why not use the low interest rate environment we are currently in. Debt is not a bad thing if used correctly! 

[OldSchooI]

I concur. AHLooong!!!

[Toweringmars]

You cant just force conversion unless the shareprice is higher than the issue price. If a holder like Raddy boy were to convert it would be @ $2.3875 for his 418 shares, he would then forfeit his rights to the interest payments.  Frankly just wont happen. And if they did all convert. It would essentially mean we did a raise @ $2.3875.  You'd really be that upset about 10m shares

[rad10]

Sincity It's the spirit of Christmas so I'll play nice (and act as though I derive no schadenfreude from the mean girls clique ;-). https://leedejonesgable.com/wp-content/uploads/emblem-180129.pdf 70% of the outstanding Emblem liability is held by a single entity.  A holder who generously waived the change of control provision at the bottom of page 20 for the Aleafia takeover. 

[DrRadPaul10]

Rotflmfao. Finger boy played himself and is now playing it safe. "I think they will pay them off." What"s that smell? Go wash hands fraud man. U bought $h@t Kit Kat creep. Tick tock on the lake picture. 

[DrRadPaul10]

[rad10]

You are welcome

[stocktracker101]

This post has been removed in accordance with Community Policy

[Toweringmars]

Yeah... Hence why I called you out for speaking out of both sides of your gobbler. Like going all in on black and red at the same time, or betting on both teams in proline. You're bound to win. You also said several times how you dont think they can pay them off... And really? I know you're one to avoid confrontation and looking people in the eyes. But to just overlook my posts

[Obserrverr]

*REPOST* Agreed.  Hog Man Myfist and that retail rad rat fill this site with bluster bravado bullsshit. All of which can not and will not hide the fact their IQ's fail to exceed their resting pulse rates. They strive to look at the calculated erosion of confidence in a given stock. Erosion by means that are, in every sense, void of truth, hinged on deception and

[Toweringmars]

Wasnt hogman saying the other day that people would be better served to colled 2% annual gains in a savings account? I bet he's eating his shirt on this one. Retail Rad wont reply anymore. And if he does he's going to completely ignore everything but his own interests and posts.  Well put Observer. Tick tock.   

[stocktracker101]

This post has been removed in accordance with Community Policy

[rad10]

I didn't - I posted "you are welcome".  I could have posted "you're welcome" You are an illiterate fool.

[stocktracker101]

This post has been removed in accordance with Community Policy

[Toweringmars]

The three month advanced moving average would suggest that 'yojur" all wrong. Also, yojur all right at the same time... I think yojou'll all see in good time that none of this matters much. tick tock

[OldSchooI]

You're absolutely correct. That's all he's ever had. Hot air. Desperate people do desperate things. Rad10 is what we like to call a "ham and egger." He should change his name to GotCrumbs..not rocks..lol. Regardless, I'm good either way because my life is dialed in hard with or without him. Aleafia Looong!!! 

[Toweringmars]

Yojou said it best. Proceed with caution when dropping food analogies though...  Myfirst might attack his computer screen in desperation. Nom Noms

[stocktracker101]

This post has been removed in accordance with Community Policy

[OldSchooI]

Hey stocktracker, sorry for the delay. You ever dream in 3D? 

[stocktracker101]

This post has been removed in accordance with Community Policy

[ShortNScuffraif]

Found it for you. This goof is almost a bigger pos than me.  myfistyourbutt (58) User Actions   November 27, 2020 - 02:07 PM 687 Reads Post# 31990566 I hope everyone makes their 3% gain on this stock in a year. LOL if you're lucky.

[rad10]

Hi Observerr My resting pulse rate is around the current stock price - even with all this excitement.  Did you ride this down from 4 bucks? The timing of the announcement is straightforward - a debenture amendment needs a minimum of 30 days notice. The course is as predicted in my post. Sorry you are a one trick pony.  What other stocks you into? Cheers Rad10.