Sunniva Inc C.SNN

Question on Canadian Facility and Cash

[Nikopain]

I've been tracking SNN for a while and its getting to a price which is very enticing, i just want to get clarity on 2 things, hopefully you guys can help out

As at December 31, 2017, they had about 12M in cash + 2M receivable. in 2018, they paid 3M for FSD loan and closed 28M bought deal. With annual burn rate of 8M, this leaves about 31M for construction

1. Cathedral City Build = As i understand, construction is undrway with outerframe nearly complete, and the interior is left to do. They expect to complete by june/july with first harvest in September. At YE 2017, the Construction in Progress spent was 6M. As per MDA, it will cost 60M for phase 1. So they would need 54M to finance construction. Did they get a construction loan? since the recent 28M bought deal is for WC and canadian facility.

2. Canadian Facility = They just bought the land for like 7M, so that takes a bit of the 31M away. Assuming phase 1 will also cost about 60M, they still need a lot of money unless they are using construction financing. but i would have thought this would be disclosed? Closing is in June. and they need to start supplying canopy Jan 2019... how is this all going to come together? 

there must be a bought deal of some kind on its way, justifying the share drop?

[justinpaul]

thats great you have been tracking it, but have you been reading and watching what you can on it?  1. Cali operation: barker pacific is the owner of the property, who is building the facility and sunniva is leasing it back from them. 2. Okanagan operation: teir 1 bank financing is said to be the way they are going to fund construction of the facility, likely correct on a 50-60 million loan to

[GOTMONEY]

I think justinpaul is largely correct, though the Ok Falls (Canada campus) facility will cost C$120m, not C$50-60m. This will be 100% financed via debt, of which 60% will be through traditional bank loans and 40% will be junior debt (from PE firms or similar). The Cathedral City facility (Phase 1) is already fully paid for by Barker Pacific Group and will be leased back by Sunniva for an

[justinpaul]

Thanks for clarifying, as well as adding about canopy as I think a lot of people were squabbling over the fact that January all 45,000kg were needed to be produced and sold to canopy, when that isn’t the case!

[JMark80]

That's ridiculous, nobody thought that.

[Nikopain]

yeah i certainly did not. Thanks for the update on Cali, its not that clear in the Financials and MDA unless i missed it. I saw the sale and leaseback but didnt know they were financing the construction, thanks for this As for Canada, hopefully they land this, i guess this is why the market has put pressure on them. 

[GOTMONEY]

They will 100%, without a shadow of a doubt, land that. As certain as the sun rising in the east.