RE:From Aphria's Q4 2020 Consolidated Financials Sect. 18 excellent post DD. Petty cool how APHA made $12,000,000 profit upon conversion of the recent buyback. They only have to issue 50 million shares until 2023 to cover the debt or pay back in cash and make a profit on the conversion. This is why APHA is a power house when it comes to raising money like no other LP can. They now have more money than WEED.
During the year, the company entered into an agreement to repurchase $90,800 USD** of the Notes for 18,742,250 common shares of the Company. The Company recognized a gain of $12,452** on the settlement of the Notes (Note 26), none of the terms of the remaining Notes were changed. As at May 31, 2020 there was $259,200 USD principal outstanding.
**in thousands
Daredevil1964 wrote: Apon further investigation about Aphria's Convertible Denbenture. Please note the following. This is the reason why we may not see APHA run to 10USD. This is the reason why the SP has been surpressed during the last 4 quarter's. The balance is now approx. 270 million on CD issuance. Basically if the SP is 130% of 9.38USD for 20 out of the last 30 trading days then the notes can be converted at anytime. Read below Please. Aphria is not in a position to convert the notes.
18. Convertible debentures The unsecured convertible debentures were entered into in April 2019, in the principal amount of $350,000 USD, are due in five years from issuance (the “Notes”). The Notes bear interest at a rate of 5.25% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2019. The Notes are an unsecured obligation and ranked senior in right of payment to all indebtedness that is expressly subordinated in right of payment to the Notes. The Notes will rank equal in right of payment with all liabilities that are not subordinated. The Notes are effectively junior to any secured indebtedness to the extent of the value of the assets securing such indebtedness. Holders of the Notes may convert all or any portion of their Notes, in multiples of $1 USD principal amount, at their option at any time between December 1, 2023 to the maturity date. The initial conversion rate for the Notes will be 106.5644 common shares of Aphria per $1 USD principal amount of Notes, which will be settled in cash, common shares of Aphria or a combination thereof, at Aphria’s election. This is equivalent to an initial conversion price of approximately $9.38 per common share, subject to adjustments in certain events. In addition, holders of the Notes may convert all or any portion of their Notes, in multiples of $1 USD principal amount, at their option at any time preceding December 1, 2023, if: (a) the last reported sales price of the common shares for at least 20 trading days during a period of 30 consecutive trading days immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
Daredevil Comments. That means that if the share sprice is 130% of 9.38 USD for 20 trading days within a 30 trading day window, then the notes can be converted at anytime preceeding Dec. 1 2023.
(b) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1 USD principal amount of the Notes for each trading day of the measurement period is less than 98% of the product of the last reported sale price of the Company’s common shares and the conversion rate on each such trading day;
(c) the Company calls any or all of the Notes for redemption or; (d) upon occurrence of specified corporate event. The Company may not redeem the Notes prior to June 6, 2022, except upon the occurrence of certain changes in tax laws. On or after June 6, 2022, the Company may redeem for cash all or part of the Notes, at its option, if the last reported sale price of the Company’s common shares has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period ending on and including trading day immediately preceding the date on which the Company provides notice of redemption. The redemption of Notes will be equal to 100% of the principal amount plus accrued and unpaid interest to, but excluding, the redemption date. During the year, the company entered into an agreement to repurchase $90,800 USD of the Notes for 18,742,250 common shares of the Company. The Company recognized a gain of $12,452 on the settlement of the Notes (Note 26), none of the terms of the remaining Notes were changed. As at May 31, 2020 there was $259,200 USD principal outstanding.