Aleafia Health Inc ALEAF

Aleafia Health Inc. is a federally licensed Canadian cannabis company offering cannabis products in Canadian adult-use and medical markets and in select international markets. The Company is engaged in the production, sale, and distribution of cannabis. It operates a virtual medical cannabis clinic staffed by physicians and nurse practitioners which provide health and wellness services across Canada. The Company operates two licensed cannabis production facilities and operates a strategically located distribution center all in the province of Ontario, including the largest, outdoor cannabis cultivation facility in Canada. The Company produces a diverse portfolio of cannabis and cannabis derivative products including dried flower, pre-roll, milled, vapes, oils, capsules, edibles, sublingual strips and topicals. It markets and sells cannabis products through regulated intermediaries into selected international markets, tactically sells cannabis products into Canadian wholesale markets.

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Aleafia Health Inc > Convertible Debentures

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Comment by rad10on Jan 05, 2021 11:07am

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Post# 32223574

RE:RE:RE:Convertible Debentures

You are welcome

rad10 wrote: Sincity

It's the spirit of Christmas so I'll play nice (and act as though I derive no schadenfreude from the mean girls clique ;-).

https://leedejonesgable.com/wp-content/uploads/emblem-180129.pdf

70% of the outstanding Emblem liability is held by a single entity. A holder who generously waived the change of control provision at the bottom of page 20 for the Aleafia takeover.

A typical dilution liability would be as follows:

(outstanding balance / 90% of (7 day VWAP) share price). Please note the prospectus does NOT contain this option. This would be subject to negotiation with the biggest holder if they can't or are unwilling to make the full redemption payment in cash 6 weeks from now. Method can confirm this.

If they take this nuclear option - the BEST case scenario is 56 million new shares, assuming no further cratering of the share price. That's a massive assumption. They may choose to do another unexpected independent capital raise to pay it off - similar to what we all saw in May.

Another option is to renegotiate the term with the debenture holder. Kick the maturity date down the road. These deals typically increase the coupon, include warrants and / or lower the equity conversion price.

I think they will just pay it off - and thats why I rebought some of the listed debentures at 60 and change.

Debentures are fun. The devil is in the details.

Grab your popcorn & Happy investing!

N.B. insiders own less than 3.5% of the shares in this company.