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Bullboard - Stock Discussion Forum SOL Global Investments Corp C.SOL

Alternate Symbol(s):  SOLCF

SOL Global Investments Corp. is a Canada-based diversified international investment and private equity holding company, which is engaged in investing in small and mid-cap sectors. The Company’s investments range from minority positions to strategic holdings with active advisory mandates with an objective of providing shareholders with a long-term return through capital appreciation, dividends... see more

CSE:SOL - Post Discussion

SOL Global Investments Corp > SolCF's Value in Bluma
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Post by jthottam on Jan 06, 2021 9:06pm

SolCF's Value in Bluma

There have been a lot of questions and discussion surrounding SolCF's owernship in Bluma, so here is my attempt at a breakdown of it based on August 31st, 2020 MDA filings with the Canadian Securities Exchange:
 
First, let's look at SolCF's direct ownership:
 
14% of shares issued and outstanding = ~$12MM
 
 
 
Additionally, there is indirect ownership in Bluma as follows:
 
25,639,204 shares through partnerships/agreements = ~$25.6MM
 
10,371,000 share purchase warrants = ~$6.6MM
 
$4,536,932 convertible into units composed of 1 share and 1 share purchase warrant (its tricky to value this since we don't know the conversion terms exactly so I will treat the fair value calculated back in August 31st, 2020 as the same now which will be a conservative estimate given where Bluma is trading on a relative basis)
 
Promissory note payable by Bluma Wellness =  $6,384,816 
 
6,450,000  Share purchase warrants associated with promissory note = ~$4.23MM
 
All of this equates to at total value of SolCF's Ownership in Bluma (both direct and indirect):
 
~$12MM 
+ ~$25.6MM 
+ ~$6.6MM 
+ ~$4.536932 
+ $6.384816MM 
+ ~$4.23MM
= ~$59.4MM
 
IMPORTANT NOTE: There is no discussion or disclosure of any other fees, warrant prices/strike  prices, or other ancillary fees, so the above analysis assumes the warrants are all penny warrants (or equivalently zero).
 
The following are excerpts from SolCF's MD&A filing section as August 31st, 2020 which support my analysis above:
 
"As of August 31, 2020 the Company owned approximatly 14.03% of Bluma’s issued and oustanding common shares. The estimated fair market value of this position was $7,073,843.  Through partnerships and agreements, the Company has additional economic exposure to 25,639,204 shares, 10,371,000 share purchase warrants and convertible debentures with a principal value of $4,536,932 convertible into units composed of 1 share and 1 share purchase warrant."
 
Later it says:
 
"SOL’s position in Bluma Wellness was measured at fair value based on the market price of Bluma Wellness with appropriate discounts applied to shares held in escrow or otherwise restricted. Warrants were valued using the blackScholes option pricing model."
 
later it also said:
 
"The Company also held a promissory note payable by Bluma Wellness with a principal value of $6,384,816 and 6,450,000 share purchase warrants."
 
So, if you are looking for a total fully diluted value of SolCF's value in Bluma you may consider using ~$60MM based on today's trading value of Bluma.
 
Hope that helps and Happy Investing!
Comment by thorgb1 on Jan 07, 2021 10:07am
BOOM! You got it!
Comment by Commoncents on Jan 08, 2021 7:09pm
Great job, thanks for charging. Bluma is on Fkn fire right now!!
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