RE:RE:RE:aphria cut expenses significantly ,zena 's cut areZFowler - (5/12/2020 10:28:23 AM)
RE:RE:aphria cut expenses significantly ,zena 's cut are Yes, Q1 is very important. However, reducing expenses by 10 million per quarter is no small feat. They won't have the 80 million in impairment this year nor will they have 5 mil in aquisition fees. Therefore, 2020 is shaping up to have far lower costs.
On addressing the debt. How can you say pushing it to 2025 is not addressing it? The alternative was paying 50M this summer which wasn't happening. I don't think any financial institution could lend them the 50M due to the risk. I think they did the best they could with the situation Andrew put them in.
Exactly what is the debt in June of 2020 now? You said $22 million - where is this money coming from? Oh I forgot - maybe sales from Isreal.
Also, on their potential:
1. I can basically guarantee that they will make all their debt payments this year and then move on to 2021 where very little debt is due. No way the big boys pushed back their 50M in June if Zenabis wouldn't be able to make their debt payments to others in June and October (around 22 million due) and end up going out of business. (There is now 30M due because the big debt holders added another 10, also something they wouldn't do if Zena couldn't pay it back.)
The 'big boys' had a choice to let Zena default and declare bankruptcy or extend to 2025. Like credit card companies or car loans, extended fianncing means more interest payments, not because the big boys have big hearts. (who are these big boys anyway - Joey's Loans and Used cars).
Of the $10 million you refer to, $7 million has to be repaid by July 2020 - with a flat $350,000 f'processing' fee. It's a short term loan at 14%, with only 3.75 million in actual 'new' money. They will do all this because Zena does have the physical assets to cover the loan. Is the $7. million part of the $22m you metioned - or on top of?
2. Yes, there is an over supply in Canada. Ontario opening 100s of stores will do a lot to help reduce the over supply. Further, have you not seen that they are (pending approval) going to start shipping hundreds of kilos per month to Europe and possibly regular shipments to Israel too? They are also signing supply agreements domestically. They are seemingly doing quite well to move their product.
Opening new stores will help solve the over supply? So if a greenhouse grows too much produce - all Safeway has to do is open more stores?
Zena needs actual approval, not 'pending' - when do you think theis will happen? 'Maybe' shipments to Isreal? You can't pay your bills on this.
I said the potential is there - we need realistic results, not maybe's
3. As we know, the big boys that are due 50M put in a royalty clause. They seem to think Zenabis can sell 20M+ per quarter. Their market cap is 20M right now. I don't think people realize how most competitors are valued at 2 to 10+ times revenue. Zenabis is valued at 0.28 times revenue.
How is paying the 'big boys' a 3.5% royalty on sales a good thing?
How is issuing 71.2 million warrants with an excercise price of .07cents for FIVE YEARS a good thing, if Zena's actual share price if $1.00 in two.
4. Equity is 80+ million, market cap is 20 million.
And the debt is what again?
It's hard to not think Zenabis is undervalued with the potential to shoot up.