Supreme Cannabis Company Inc. (The) T.FIRE

Cash flowPositive q4??

[johnale]

Looks like tgod got 1mil from CEWS in the q. 

even at the low end - supreme forecasting growth from last q. even if we call it 10.5mil 
accounts receivable were greater than liabilities last q. 

operational costs come in at 9.5mil
interest payouts 3.875 (debenture and loan) semi annual payment. 

ATM returned - 1.75mil in q 
cews - should return 2mil ish 

cash in - 15.25 
Cash out - 13.375 

even on low end revenue - cash position should increase q4.

[maritimedreamer]

one must also wonder where all the sales have gone too! Cron, VFF, CGC, APH, TGOD, OGI  etc.... they are all showing 1) decrease in wholesale (johnale you conirmed with IR that whoelsale still open for supreme?) and 2) Rec sales: for some are double.... TGOD..... for some they are down... VFF..... There are many more LPs and SKUs out there... but the real quesiton to all of us here was if

[maritimedreamer]

and yet as i type this out we see a major dump by scotia capital in open market.... almost 300k.... this stock is such  a love hate relationship

[johnale]

We've dipped a few times to 19.5 - and magically a big bid comes in to prop the stock.  we won't trade up significantly until the debenture trades up a bit more - as there is a arbitrage opportunity if your willing to hold 31.75% of the shares you get for 4mths. next week hopefully the deal is finalized - and the trades settle out.  also waiting for a full Corp update and

[Method]

Are you getting this from IR? I don't think people understand how attractive the debenture is but I have been saying that for a while. Also, if someone thought the stock was cheap at 30 cents when the enterprise value was over $260m, now the enterprise value is under $200m so to get back to $260m takes the stock just over 30 cents. The equity is cheaper now with less risk than before now

[johnale]

Ya IR - I am assuming finilizing deal part tho.  I also think I will concede the bet - as the debentures are inexplicably linked to the equity -  an investment in the debenture at 26 will forever beat the equity at 24.  although - if you look at it from the perspective of recouping our investment - (say we both needed the stock and debenture to go back to 1 to break even)(or

[BCmountainman]

yeah i will tell you its going to O

[Method]

It was a good bet. Thanks for keeping it professional.  I don't think the stock can ever do better than the debs until the old debs are gone. We'll see how the new debs trade. They should trade much closer to par given where FIRE is trading, significantly less debt and higher interest rate but I also wouldn't expect common holders not to have switched to the debentures before and

[watchmeplz]

I'm curious method, what specifically happened to your debentures? did they automatically get converted to equity? 

[Method]

Nothing yet. They haven't provided any detailed information yet but I assume in a few weeks for every 10k face value of bonds (cost about $3100 to buy on open market + accrued interest) will get 11,600 shares of which half will be freely traded (half will have 4 month hold) and $3650 face of another convertible debenture with a 28.5 cent conversion price (which based on a 20 cent price for the

[johnale]

"The arb is the short borrow. That's why the opportunity exists. "   why is the spread so much? It's like 36.5% difference - with the debs trading at 31 vs fire at 20? (All in 12.71vs20)  everything should be finalized before September 1 as per the release. there isn't a huge time lag here.  thanks    

[Method]

The borrow is really expensive. It's harder to borrow a penny stock and the borrow is often based on USD$1.00/share so it really adds up regardless of the rate but that is also high in this case. It's a lot of stock to hedge too per $ of face and most arbs will hedge the new convertible bond too. The four month hold stock is obviously the most expensive but there is a chance that gets much

[Method]

I should add anyone who decides to buy the convertible debentures in addition to their common shares actually reduces the amount of shorting and if investors were able to get the converts up to fair value, there would be tons of short covering from arbs along the way which might help the stock go up. It takes new capital though.