RE:RE:RE:RE:Shares outstanding as of 1 February1. The note holder has taken every opportunity to De-risk SO FAR, we unfortunately cannot know if payment was waved for a few months. It was stated before that they made amendments to the note, which we unfortunately don't know what they are yet. I believe they have to press release all of these points, or disclose on SEDAR, given it is a material contract. Do you have a reference for an undisclosed amendment?
2. We don't know if note holder is holding shares they are getting or if they are selling. If their intention is to hold and they now own close to 10% of Hexo (maximum allowed), it would be in their interest to wave a few payments until SP gets better for dilution. Once again I'm not saying they aren't selling, just saying we don't know. We know they are selling. If they were not selling, then they would already be avoe 10%. They have already received shares in excess of 10%. In addition, High Trail has a history of this, and is a convertible arbitrage fund. Convertible arbitrage funds do not achieve economics by being long. They achieve their economics through their role of convertible arbitrage.
3. Raised through ATM. Unless I've missed this info, we don't have an update on cash since October 31. They had 56M in the bank at the time + If they use the ATM a lot in November/December, that was at a way higher SP and therefore dilution might be lower. What I would perceive to be their "stretch" goal was to be Adjusted EBITDA positive. But that does not mean operating cashflow positive, given most cannabis companies simply generate massive amounts of inventory and then use periodic writedowns to pretend they are Adjusted EBITDA positive while continuing to burn massive amounts of cash. I would say there is some meaningful operating cost burn. Using cash on hand for the note payments before they are actually cashflow positive would be insane from a liquidity management standpoint. It is possible, but if that was the approach then there they have made themselves even more susceptible to the Secured Noteholder.
4. Pretty hard to find how much they need for operations with all the costs related to acquisitions in the past couple earnings. We should have a better idea with the next report (if all one time costs are finally over with). Covered in my point three response.
I still think my estimate is a reasonable one, but thank you for responding on a factual basis, as opposed to an ignorant or purely emotional basis.