Emerald Health Therapeutics Inc TBQBF

VFF 100% OF PSF

[Lazorsharp]

Where is this dispute heading? Many believe that in the end, VFF will become the sole owner of PSF. But its not that cut and dry. A dispute resolution process has now begun that declares the two are in a legal dispute. Leaving PSF with two options essentially. Either the dispute will be resolved OR one side will be forced to put an offer on the table following a formal valuation. The worse case scenario is the JV is terminated and PSF ends up in the courts for years to come. Its looking more and more likely that the dispute wont be resolved amicably. Therefore, one can expect both parties to move towards the buyout option. A shotgun clause likely exist that is triggered with a certain number of unresolved PSF Board of Director meetings regarding the dispute. The first step of the shotgun clause is agreeing on a formal evaluation of the value of PSF. With about $100m+ sales annually, one can expect a formal evaluation to succeed a $400m price tag. Thats fair value. A $200m minimum payment is expected to buy the other party out. A dollar figure that neither party currently has access to. One party would need to raise a substantial amount of money to secure the asset. In addition to the money required to complete the Delta 2 Greenhouse. With EMH only achieving a $60m market cap, it would be an upward climb for the company to raise the money required in a short period of time. Considering EMH could end the dispute with a $13m payment to PSF. The purchasing party is more likely going to be VFF. Investors seem confident in that VFF can get the capital required to buy out EMH. They have a very capable CFO in Stephen Ruffini. VFF share structure and investor base is strong. Therefore, investors can expect VFF is already planning to do a raise in relation to a potential buyout. Tapping into its American investor base. VFF can also offer to issue shares directly to EMH as form of payment. However, VFF biggest mistake to date remains to be involving EMH in the first place. As the ugly reality remains that VFF will likely have to payout EMH 10x its investment to date. A bitter pill to swallow for VFF investors when considering the company originally owned all the core PSF assets.